Nike is facing a class action lawsuit following the shutdown of its crypto-focused subsidiary RTFKT, a move that plaintiffs say triggered steep losses in Nike-themed NFTs and related digital assets. The complaint was filed in the U.S. District Court for the Eastern District of New York and is led by Australian investor Jagdeep Cheema.
According to the lawsuit, buyers were allegedly misled into purchasing digital assets tied to the Nike brand and the RTFKT ecosystem, only to see their value collapse after Nike ended the project in December 2024. Plaintiffs now argue that the assets in question may have functioned as unregistered securities, making the legal classification of NFTs a central issue in the dispute. The suit is seeking more than $5 million in damages.
RTFKT Closure Sparks Investor Backlash
Nike acquired RTFKT in 2021 as part of its push into digital fashion collectibles, aiming to combine gaming, internet culture, and branded virtual goods. The company positioned the unit as a forward-looking bet on Web3 engagement and digital identity. But when Nike later announced that RTFKT would shut down, while saying its creative influence would continue, investors were left facing a sharp decline in the perceived value of associated NFTs.
Plaintiffs claim Nike’s branding and market presence played a meaningful role in their purchasing decisions, and that the shutdown undermined expectations around the long-term viability of the project. The lawsuit also cites consumer protection laws in New York, California, Florida, and Oregon, broadening the case beyond securities-related arguments alone.
NFT Regulation Back in the Spotlight
The case adds to the broader legal debate over whether certain NFTs should be regulated as securities. That question remains unresolved across much of the digital asset industry, especially when branded collections are marketed with strong commercial narratives. Nike has not publicly commented on the lawsuit, but the dispute could become an important reference point for how courts assess corporate accountability in crypto-linked consumer products.
More broadly, the lawsuit highlights the risks that emerge when major brands enter Web3 markets without a clearly defined framework for consumer protection after project closures. As regulators and courts continue to grapple with NFT classification, this case may shape future expectations around disclosure, marketing, and post-shutdown responsibilities in the crypto economy.