A cohort of non-fungible token holders has filed a class-action lawsuit in opposition to Nike over the abrupt shutdown of its RTFKT platform.
In response to a submitting with the U.S. District Court docket for the Jap District of New York, the plaintiffs declare Nike carried out a “rug pull” by selling sneaker-themed NFTs, pocketing income from preliminary and secondary gross sales, after which shutting down RTFKT in January 2025, leaving holders with steep losses and nugatory property.
The lawsuit, led by an RTFKT holder, Jagdeep Cheema, seeks $5 million in damages and requires a trial by jury to resolve the claims. It accuses Nike of violating client safety legal guidelines and promoting unregistered securities.
Plaintiffs argue that the Nike NFTs meet the factors for securities below the Howey Check, as patrons made an funding of cash in a typical enterprise with an expectation of income tied to Nike’s ongoing efforts.
“As such a digital asset is correctly labeled as a safety below related legislation, the issuers of such a token are required to register them and file related statements with the authorities and adjust to related securities legal guidelines. The Nike NFTs had been by no means registered as such,” the lawsuit famous.
Nike acquired RTFKT in December 2021, through the peak of NFT mania, positioning the transfer as a part of its larger push into the digital world. On the time, RTFKT was praised for mixing style, gaming, and blockchain tech in ways in which captured large consideration throughout the crypto and sneaker communities.
The studio rapidly grew to become a standout title, with tasks like CloneX and Cryptokicks producing hundreds of thousands in gross sales. Early patrons had been promised a gamified expertise with quests, forging occasions, and unique drops that tied digital collectibles to real-world rewards.
Nevertheless, because the broader NFT market cooled all through 2023 and 2024, curiosity in RTFKT’s collections additionally began to fade.
In December 2024, Nike introduced RTFKT would wind down after one last launch, the “Blade Drop,” describing the transfer as a shift towards preserving RTFKT’s legacy slightly than an outright shutdown.
The plaintiffs argue that Nike’s withdrawal crushed the worth of the NFTs, a lot of which had as soon as traded for hundreds of {dollars}, and worn out promised ecosystem options like quests, rewards, and unique entry to limited-edition merchandise.
Nike and RTFKT had additionally allegedly promoted the NFTs with guarantees of peer-to-peer buying and selling and an lively ecosystem the place finishing challenges and forging sneakers would add actual worth.
After the shutdown, these options disappeared, the secondary market dried up, and NFT costs collapsed nearly in a single day.
“Predictably, costs plunged and didn’t get well. Buyers – a few of whom are cited on this criticism – and the crypto neighborhood at massive lamented Nike’s brazen rug pull,” the lawsuit added.
