Nike Facing $5M Lawsuit After Shutting Down Its NFT Platform
NFTs came and went before anyone really understood their purpose, but the effects are still being felt.
One of the companies that jumped on the craze was Nike, with the Ethereum RTFKT. However, because Nike is now winding down its involvement, investors are suing the Oregon-based athletic giant.
A class action lawsuit in New York’s Eastern District was filed on Friday with plaintiffs, led by Jagdeep Cheema, seeking “unspecified damages of more than $5 million for alleged violations of New York, California, Florida and Oregon consumer protection laws.”
They claim that Nike’s decision to pull the plug on its sneaker-themed digital assets in December 2024 felt like a “soft rug pull” because suddenly, their investments were near worthless, reports The Verge.
The suit also says the NFTs were unregistered securities—which often come with a lot of risk—and investors never would have invested if they’d known that. Investors claim Nike plied them with marketing built to “hype, promote, and prop up” NFTs, and once they profited, they left them to rot, something they thought a company as reputable as Nike wouldn’t do.
“One does not expect it from Nike, the international sports juggernaut with yearly revenue of around $50 billion. But that is what Nike did,” the complaint reads.
RTFKT, pronounced artifact, was purchased by Nike in 2021 for an unknown amount. Then Nike CEO and President John Donahoe claimed the purchase would power “Nike’s digital transformation and allow us to serve athletes and creators at the intersection of sport, creativity, gaming, and culture.”
Nike eventually brought the NFT to life with exclusive Nike drops, including the Nike x RTFKT Dunk “Ghost” and RTFKT x Nike Air Force 1 Genesis, which was limited to 1,776 pairs. Sneakerheads were only allowed to cop them after purchasing the NFT, and the hype only increased when LeBron James wore a pair.
But a few years removed from the digital collectibles craze, RTFKT announced on X last December that the moment was over.
“Today we’re announcing the plan to wind down RTFKT operations,” the company said in a statement on X. “Looking back we’re incredibly proud of everything we’ve achieved together.”
Nike has yet to respond to the lawsuit.
