Investors Sue Nike Over RTFKT NFT Collapse

Nike, one of the biggest names in sportswear, is now facing legal action after shutting down its NFT business linked to RTFKT Studios. Investors, led by Australian resident Jagdeep Cheema, filed a lawsuit on Friday, claiming they suffered heavy losses when demand for their Nike-themed digital collectibles collapsed.

Good to know

• Investors claim Nike-themed NFTs were sold as unregistered securities.
• The lawsuit seeks over 5 million dollars in damages across multiple U.S. states.
• Nike has not yet responded publicly to the lawsuit.

Nike bought RTFKT Studios in 2021, betting on the rising popularity of the metaverse. The company was known for its viral sneaker designs, memes, and stylish digital assets. However, Nike decided to wind down the RTFKT project in December, ending its short-lived adventure in the NFT world.

According to Reuters, the plaintiffs argue they would not have purchased the NFTs if they had known they were buying what they now describe as unregistered securities. The legal classification of NFTs remains unclear in the United States, with several ongoing cases debating whether digital collectibles fall under securities law.

The lawsuit also accuses Nike of executing a “rug pull,” a term used when a company or project abruptly shuts down and leaves investors holding worthless assets.

The plaintiffs are asking for more than 5 million dollars in damages, citing alleged violations of consumer protection laws in New York, California, Florida, and Oregon.

Nike has not made any public comments about the lawsuit yet. As the legal process unfolds, the case could add pressure to ongoing discussions about NFT regulation and the responsibilities of large companies involved in the digital asset space.