Nike sued for $5 million in damages for shutting down the NFT platform RTFKT

A proposed class action lawsuit seeks $5 million in damages from Nike, alleging that the company violated consumer protection laws and several state laws on unfair competition and trade practices.

Nike has faced a class action lawsuit accusing the sportswear giant of conducting a compensation campaign for shutting down the non-fungible token (NFT) platform RTFKT in January. A group of RTFKT users led by Jagdeep Cheema claimed in the class action filed in federal court in Brooklyn on April 25 that they suffered "significant damages" due to Nike promoting sneaker-themed NFTs to attract investors, only to later shut down the platform.

The lawsuit claims that the NFTs are unregistered securities, as Nike sold them without registering with the Securities and Exchange Commission. The lawsuit accuses the company of using its "iconic brand and marketing power to hype, promote, and support the unregistered securities that RTFKT sold."

The lawsuit argues that: "Because the value of Nike NFTs derives from the success of a certain promoter and project — here, Nike and its marketing efforts — investors bought this digital asset with the hope that its value would increase in the future as the project became increasingly popular based on the Nike brand." #NIKE