Nike is under fire after shutting down its NFT platform RTFKT. A group of investors filed a class-action lawsuit in Brooklyn federal court, accusing the brand of pulling a “rugpull.” They claim Nike hyped RTFKT NFTs using its massive brand power and then abruptly closed the project. According to the lawsuit, this move caused major financial losses for holders of the NFTs. Investors argue they suffered “significant damages” and are now demanding $5 million in compensation.
Nike Allegedly Sold NFTs As Unregistered Securities
The lawsuit also alleges Nike sold unregistered securities. The plaintiffs say Nike used its marketing muscle to push NFT sales without proper registration. Since the value of the NFTs was closely tied to Nike’s reputation, buyers believed the assets would rise in value. Instead, when Nike shuttered RTFKT, the prices collapsed. Even though courts have not yet decided if NFTs are securities, the investors argue this issue does not need resolution to prove their case.
NFT Market Crash Made Matters Worse for RTFKT Holders
The timing of the RTFKT shutdown couldn’t have been worse. The overall NFT market has plunged in 2025. In just the first quarter,NF T sales dropped 63% compared to last year. Nike’s RTFKT NFTs, once trading at around $8,000, fell to just about $16 on the secondary market. Investors also lost the opportunity to earn rewards through platform quests and challenges, a major reason many bought the NFTs in the first place. The lawsuit claims these losses were a direct result of Nike’s actions.
Nike’s NFT Strategy Draws Heavy Criticism
Investors are accusing Nike of using RTFKT as a quick cash grab. They say the brand attracted buyers with promises of innovation and digital rewards, only to abandon the project once profits were made. The “soft rugpull” allegations paint Nike as a company that abused its brand trust in the crypto space. Critics argue that large companies like Nike must be held accountable when they enter Web3 markets and treat NFTs like hype products rather than genuine investments.
Future of NFTs and Legal Implications for Nike
This lawsuit could set a major precedent for NFTs in the United States. If courts start treating NFTs like securities, companies will face stricter rules. Nike’s defense could hinge on the fact that the SEC has not clearly defined NFTs under existing securities laws. However, the damage to Nike’s reputation among Web3 investors may already be done. Meanwhile, platforms like OpenSea continue to lobby for NFTs to be excluded from federal securities laws. Regardless of the legal outcome, this case highlights the risks investors face when relying on big brands to back blockchain projects.