Nike Faces a $5 Million Lawsuit Over Its Collapsed NFT Project RTFKT
Nike is facing a proposed class action lawsuit filed in the U.S. District Court for the Eastern District of New York by purchasers of Nike-themed non-fungible tokens (NFTs) and other cryptocurrency assets. Led by Australian resident Jagdeep Cheema, the plaintiffs claim they suffered significant financial losses following the abrupt December 2024 shutdown of RTFKT, Nike's digital asset unit. They allege that Nike misrepresented the nature of the NFTs, which were purportedly unregistered securities, and that the closure eliminated demand for the assets, causing their value to plummet.
The plaintiffs argue that Nike used its brand power and marketing expertise to promote what they describe as unregistered securities before suddenly abandoning the project. They claim Nike capitalized on the crypto boom to drive NFT sales, and once RTFKT was dissolved, these incentives vanished, leaving investors with worthless digital assets.
The lawsuit seeks over $5 million in damages, citing violations of consumer protection laws in New York, California, Florida, and Oregon.
Nike acquired RTFKT in December 2021, aiming to innovate in digital collectibles. Despite announcing RTFKT's winddown, Nike affirmed that its legacy would continue through inspired creators and projects.
The legal classification of NFTs remains uncertain and has become a contentious issue in courts. If the court rules in plaintiffs’ favor, Nike could face not only financial penalties but also reputational damage that could deter future innovation.
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