Nike Class Action Lawsuit Over NFT Platform Shutdown: $5M Demand

Nike Faces $5 Million Class Action Over NFT Shutdown

A proposed class-action lawsuit claims Nike misled investors by shuttering its NFT platform RTFKT, seeking $5 million in damages for alleged consumer protection law violations.

Background and Context

The recent Nike class action lawsuit over NFT platform shutdown significantly impacts the evolving landscape of digital assets, particularly as companies increasingly engage with NFTs. This lawsuit, stemming from Nike’s closure of the RTFKT platform, raises critical questions about consumer rights and regulatory frameworks in the burgeoning NFT market. Historically, the rise of NFTs in 2021 captured global attention, with major brands like Nike diving in to capitalize on this digital trend. However, the abrupt termination of RTFKT in January has left many investors feeling vulnerable and misled, igniting a legal battle that accuses Nike of a ‘rug pull’.

Recent declines in NFT sales, which plummeted by 63% year-over-year in early 2025, heighten the urgency of this situation, revealing broader implications for the entire cryptocurrency market. With ongoing debates surrounding the classification of NFTs as securities, the outcome of this legal case could set a critical precedent for how digital assets are regulated in the future. Notably, the lawsuit seeks $5 million in damages, arguing that consumers were misled without the protection usually afforded to regulated securities.

Nike Faces $5 Million Class Action Lawsuit Over NFT Platform Shutdown

In a significant legal move, Nike is facing a proposed class action lawsuit seeking $5 million in damages, stemming from its abrupt shutdown of the NFT platform RTFKT. This lawsuit, filed on April 25 in a Brooklyn federal court, alleges that Nike violated consumer protection laws and various state unfair trade and competition laws. Plaintiff Jagdeep Cheema, representing a group of affected RTFKT users, claimed they experienced “significant damages” as a result of Nike’s actions.

Details of the Lawsuit Against Nike

The core accusation of the lawsuit is that Nike executed a rug pull following the promotion of its sneaker-themed NFTs by marketing them as valuable investments. The lawsuit contends that these NFTs were unregistered securities, asserting that Nike failed to register them with the Securities and Exchange Commission (SEC). According to the class suit, “Nike utilized its iconic brand and marketing prowess to hype and promote unregistered securities that RTFKT sold,” which misled investors into purchasing the digital assets.

The lawsuit further argues that the value of Nike’s NFTs relied heavily on the brand’s marketing efforts and that buyers expected their investments to swell in worth as the RTFKT project gained traction. At the height of their popularity, Nike’s crypto kick NFT collection was trading at an average of 3.5 Ether (approximately $8,000), yet post-shutdown, the same assets plummeted to about 0.009 Ether (approximately $16), devastating investors.

Market Impact and Current Trends

Nike’s decision to shut down RTFKT in January is claimed to have drastically lowered the prices of NFTs, preventing buyers from engaging in promised challenges and quests that were an enticement for their purchase. Additionally, the NFT market as a whole is experiencing a steep decline, with Q1 sales dropping 63% year-over-year, highlighting a turbulent environment for digital assets. As the legal proceedings unfold, the outcomes could set important precedents regarding the classification of NFTs, making the Nike class action lawsuit over NFT platform shutdown a pivotal case in consumer rights.

Nike Faces $5 Million Class Action Over NFT Platform Closure

The recent class action lawsuit against Nike, stemming from the shutdown of its NFT platform RTFKT, is a pivotal moment for the digital asset industry and may set a precedent for how NFTs are viewed legally. Accusers claim that Nike’s abrupt closure constituted a ‘rug pull,’ causing significant financial losses for investors who embraced these digital collectibles. This lawsuit challenges the increasingly blurred lines between digital assets and traditional securities, highlighting the urgent need for regulatory clarity in the NFT space.

With the NFT market experiencing a sharp decline, dropping 63% year-over-year in Q1 2025, audiences are growing wary of investing in projects backed by big brands. The lawsuit focuses on consumer protection laws, suggesting that major players like Nike must tread carefully as they navigate the complexities of digital assets. For the industry, this case underscores the importance of transparency and ethical practices, as well as the potential consequences of misleading marketing, raising significant implications for the broader market. As companies like Nike shape the future of NFTs, their actions will likely influence investor confidence and set the tone for the legal landscape surrounding NFTs.