Nike is facing a $5 million lawsuit for shutting down the NFT platform RTFKT.

Source: Cointelegraph Original text: "Nike faces $5 million lawsuit for shutting down NFT platform RTFKT"

Nike has been accused of "running away" after shutting down its non-fungible token (NFT) platform RTFKT in January, leading to a class action lawsuit.

A group of RTFKT users led by Jagdeep Cheema filed a class-action lawsuit on April 25 in the Brooklyn Federal Court, claiming that Nike used sneaker-themed NFTs to attract investors and then shut down the platform, resulting in "significant losses" for them.

The lawsuit claims that these NFTs are unregistered securities because Nike sold them without registering with the U.S. Securities and Exchange Commission (SEC). The lawsuit accuses the company of "using its iconic brand and marketing power to hype, promote, and support the sale of unregistered securities by RTFKT."

The lawsuit argues: "The value of Nike NFTs derives from the success of specific promoters and projects - referring here to Nike and its marketing efforts - investors buy this digital asset with the hope that as the project's recognition based on the Nike brand increases, its value will grow in the future."

The lawsuit seeks $5 million in damages, claiming that Nike violated consumer protection laws and several state unfair trade and competition laws.

A U.S. court has yet to make a definitive ruling on whether NFTs are securities. However, in an April 9 letter to the SEC, trading platform OpenSea urged regulators to exclude NFTs from federal securities laws, arguing that they do not meet the legal definition of securities.

In the case against Nike, the class action team stated that the court does not necessarily need to make a ruling on the legal status of NFTs in order to handle the complaint.

In 2021, Nike acquired the NFT company RTFKT Studios, which creates virtual sneakers.

According to the complaint, Nike NFT holders were told that these tokens could be traded peer-to-peer on the secondary market and could be used to complete challenges and tasks to earn rewards.

According to data from OpenSea, the average trading price of Nike's cryptocurrency sneaker NFT series was 3.5 Ethereum (ETH), approximately 8,000 dollars, when it was first listed on April 18, 2022. However, by April 21, the trading price had dropped to about 0.009 ETH, which is only about 16 dollars.

Nike closed RTFKT in January, with a class-action lawsuit claiming this led to significant losses for investors, as "prices plummeted and failed to recover," while also losing the opportunity to participate in challenges and tasks, which the class-action team believes was a primary reason for purchasing these tokens.

In the first quarter of 2025, the overall NFT market fell sharply, with sales down 63% year-over-year, from $4.1 billion in the same period in 2024 to $1.5 billion in January-March 2025.

Nike has not immediately responded to the request for comment.

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