Nike faces a $5 million lawsuit after abruptly closing its crypto division RTFKT.
Plaintiffs argue Nike’s NFT sales violated multiple U.S. consumer protection laws.
The case intensifies the national debate over NFTs being classified as securities.
Nike is facing a proposed class-action lawsuit after shutting down RTFKT, its crypto-focused business unit. Buyers allege that the closure caused the value of Nike-themed NFTs and digital assets to collapse overnight. The lawsuit, filed on Friday in the Eastern District of New York, seeks more than $5 million in damages.
Closure Of RTFKT Leaves NFT Buyers Claiming Heavy Losses
Australian resident Jagdeep Cheema leads the lawsuit against Nike, citing severe losses linked to the shutdown. According to the complaint, Nike’s decision in December 2024 to abruptly close RTFKT triggered a steep devaluation. Buyers claim they were left holding assets that rapidly lost most of their market value.
Besides that, plaintiffs argue that Nike’s actions violated consumer protection laws in New York, California, Florida, and Oregon. They maintain that they would not have bought the NFTs if they knew the risks involved. Hence, they accuse Nike of removing support without proper notification, severely affecting NFT holders.
Nike, headquartered in Beaverton, Oregon, did not respond immediately to requests for comment regarding the allegations. Additionally, Phillip Kim, the attorney representing the plaintiffs, also declined to provide any statement at this time.
NFT Securities Classification Emerges As Key Legal Debate
The lawsuit raises a broader legal question about whether NFTs should be classified as securities under U.S. law. Moreover, several lawsuits filed across the country are exploring this unsettled issue within the evolving crypto and NFT markets. Plaintiffs allege that Nike sold NFTs without proper registration, intensifying the ongoing national discussion.
RTFKT, pronounced artifact, was received by Nike in December 2021 as part of its digital expansion strategy. At that time, Nike described RTFKT as a leader in merging culture, gaming, and digital collectibles. However, on December 2, 2024, Nike publicly announced it would shut down the business unit. In the announcement, Nike stated that while RTFKT’s operations would cease, its influence would continue through inspired creators. Despite this statement, plaintiffs assert that the sudden termination caused irreparable financial harm to NFT buyers.Buyers participating in the case seek compensation exceeding $5 million for the sudden market collapse. They claim Nike violated several state consumer protection laws by failing to disclose critical information regarding NFT risks. Besides financial damages, the lawsuit aims to address what plaintiffs describe as deceptive practices around NFT sales. The case is officially registered as Cheema v. Nike Inc., case number 25-02305, in the U.S. District Court for the Eastern District of New York.