Nike Hit With Class-Action Lawsuit Over RTFKT NFT Collapse

Buyers Allege Nike Misled Investors Amid NFT Platform Shutdown

Nike is facing a class-action lawsuit filed on April 25, 2025, in Brooklyn federal court, as a group of RTFKT NFT holders led by Jagdeep Cheema accuses the company of orchestrating a "rug pull" after abruptly shutting down its RTFKT NFT platform earlier this year. 

The complaint alleges Nike misused its global brand influence to market sneaker-themed NFTs as unregistered securities, promising long-term value appreciation without securing the necessary registration from the U.S. Securities and Exchange Commission. Plaintiffs are seeking $5 million in damages, citing violations of consumer protection and unfair competition laws, and argue that the court does not need to conclusively determine whether NFTs are securities to rule on their claims.

The lawsuit centers on Nike's acquisition of RTFKT Studios in December 2021 and its subsequent promotion of the RTFKT Nike Cryptokicks NFTs, which once traded for an average of 3.5 Ether, or approximately $8,000, during their April 2022 peak. Following the platform’s closure in January 2025, the average value of these NFTs nosedived to just 0.009 Ether, about $16, according to data from OpenSea, reflecting a near-total collapse that investors claim was exacerbated by the sudden loss of promised benefits like secondary trading and reward-based quests. Plaintiffs argue that these engagement features were integral to the tokens' perceived value and their removal intensified financial losses.

The complaint paints a picture of widespread disillusionment among buyers who, as quoted in the lawsuit, were led to believe “the tokens would grow in value alongside the popularity of Nike’s brand.” With the broader NFT market also under pressure—total NFT sales fell 63% year-over-year in the first quarter of 2025—the collapse of the RTFKT platform dealt an additional blow to holders already facing a difficult environment. At the time of reporting, Nike has yet to respond publicly to the lawsuit, leaving many in the NFT and legal communities watching closely for the company’s next move.

This article has been refined and enhanced by ChatGPT.