Nike Hit With $5M Lawsuit After NFT Venture Shutdown

Nike is facing a $5 million lawsuit from disgruntled investors who claim the sportswear giant's abrupt closure of its digital collectibles venture, RTFKT, devastated the value of their purchases and resulted in significant financial losses.

Filed on Friday in Brooklyn federal court, the class action led by Australian resident Jagdeep Cheema and other plaintiffs accuses Nike of executing a "rug pull" by shuttering the platform in December 2024. The investors allege Nike's decision triggered a market collapse for its branded non-fungible tokens (NFTs) and associated cryptocurrency assets. According to the lawsuit, plaintiffs would have avoided purchasing these NFTs at premium prices—or altogether—had they been informed that the tokens were unregistered securities and that Nike could abandon the project without notice.

Nike, headquartered in Beaverton, Oregon, has not yet responded to the allegations.

Nike's Digital Experiment Falters After RTFKT Closure

The athletic apparel leader entered the NFT landscape in 2021 by acquiring RTFKT, a digital fashion and collectibles brand that combined elements of gaming, culture, and blockchain technology. Nike promoted this acquisition as a strategic move toward next-generation innovation in the digital space.

During its peak performance, RTFKT's NFT collections generated approximately $168 million in sales, powered by Nike's substantial marketing resources and growing consumer enthusiasm for digital ownership concepts.

However, this momentum proved unsustainable. Nike announced RTFKT's closure on December 2, 2024, stating that the innovative spirit would continue through creators and projects inspired by the brand.

Investors Challenge Nike Over Alleged Risk Disclosure Failures

Plaintiffs argue that Nike's decision to shutter RTFKT caught them completely unprepared. They assert that the company failed to adequately disclose regulatory risks associated with NFTs, particularly noting that the legal classification of NFTs under U.S. securities law remains ambiguous.

The lawsuit seeks damages exceeding $5 million, citing alleged violations of consumer protection laws across multiple states including New York, California, Florida, and Oregon. Beyond the immediate financial claims, the case raises important questions about corporate responsibility in Web3 ventures as regulatory oversight of digital assets continues to intensify.