Nike Sued Over NFTs: Buyers Claim 'Rug Pull' After RTFKT Shutdown
Wondering why Nike is being sued over NFTs? Buyers who invested in Nike’s virtual assets are accusing the sportswear giant of fraud after it shut down its RTFKT project, claiming they were misled into purchasing what they now call "unregistered securities." The class action lawsuit, filed in New York’s Eastern District, seeks over $5 million in damages and highlights deep concerns about the future of Nike NFTs and the broader NFT investment market.
The Rise and Fall of Nike's NFT Venture
Nike entered the NFT space in 2021 by acquiring RTFKT, a promising "digital sneaker" company. Riding the height of NFT hype, Nike aimed to bridge the gap between physical and digital fashion with products like the Cryptokicks iRL, a sneaker launched under the RTFKT brand. However, despite strong initial interest and millions poured into NFTs, the project never gained sustainable traction. In December 2024, Nike announced it would wind down RTFKT operations by January 2025, leaving many investors feeling abandoned.
Why Are Buyers Suing Nike Over RTFKT NFTs?
According to the lawsuit reported by Reuters, purchasers argue that Nike’s NFTs were sold as investment opportunities without proper registration, violating consumer protection laws across New York, California, Florida, and Oregon. Buyers claim they wouldn’t have spent significant sums if they had known the true risk behind these digital assets. They accuse Nike of "pulling the rug out from under them," a term commonly used in the crypto world to describe sudden project abandonment that leaves investors with worthless assets.
The Legal Stakes: Potential $5 Million+ Damages
The class action lawsuit demands unspecified damages estimated at more than $5 million. If successful, the case could set a significant precedent for future NFT-related legal battles, especially concerning unregistered securities, digital assets, and consumer protection law violations. For major brands like Nike, this lawsuit could also impact how companies approach NFT marketing, virtual asset launches, and digital investments moving forward.
RTFKT's Collapse: What Happened Behind the Scenes
After Nike’s shutdown announcement, RTFKT’s activity dwindled drastically. Samuel Cardillo, reportedly the last remaining figure managing RTFKT, spent days posting online about the disappearance — and eventual restoration — of artwork from its flagship CloneX NFT collection. This chaotic management further fueled frustration among NFT holders, highlighting the risks associated with investing in early-stage digital assets from even the most recognizable brands.
Nike NFTs and the Future of Digital Collectibles
The Nike lawsuit highlights growing concerns about the stability and legitimacy of NFTs as investments. Despite the popularity of Nike’s Cryptokicks iRL and partnerships teased with companies like EA Sports, the shutdown of RTFKT signals a cautious future for digital collectibles tied to traditional brands. With lawsuits looming and regulatory scrutiny increasing, investors are now asking: Are NFTs still a safe bet, or are they too risky even when backed by household names?
What This Means for NFT Buyers and Investors
Nike’s ongoing legal battle serves as a cautionary tale for anyone considering investing in NFTs tied to major corporations. While the promise of digital ownership remains alluring, the RTFKT saga shows how easily such ventures can collapse, leaving buyers with little recourse. As the NFT market matures, transparency, regulation, and consumer protection will likely become critical factors determining whether digital collectibles can regain trust — or fade into another speculative bubble.
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