Nike is facing a proposed class action lawsuit after investors claimed they suffered major financial losses following the unexpected closure of the company’s NFT-focused division, RTFKT.
The lawsuit was filed on Friday in a federal court in Brooklyn by a group of investors led by Jagdeep Cheema, an Australian resident. According to the complaint, Nike’s decision to shut down RTFKT in December 2024 led to a steep drop in demand for Nike-branded non-fungible tokens and related crypto assets.
The plaintiffs argue that they would not have purchased the NFTs if they had known the tokens were unregistered securities or that Nike would end the project without warning. They are seeking over five million dollars in damages, citing violations of consumer protection laws in New York, California, Florida and Oregon.
Nike, based in Beaverton Oregon, has not released an official response to the lawsuit. Phillip Kim, an attorney representing the plaintiffs, declined to comment on the case.
Nike acquired RTFKT in December 2021 and described it as a forward-thinking brand blending fashion, gaming and digital collectibles. The company announced the division’s winddown on December 2, 2024, stating that the innovation sparked by RTFKT would continue through the creators and projects it had inspired.
The case highlights ongoing legal uncertainty surrounding NFTs and whether they should be classified as securities under US law.
