The closure of the RTFKT NFT platforms is causing trouble for the company
Nike is facing a class-action lawsuit after the abrupt shutdown of its NFT platform, RTFKT, earlier this year. A group of RTFKT users, led by Jagdeep Cheema, filed the complaint in a Brooklyn federal court on April 25, claiming they suffered “significant damages” because of the closure. The lawsuit argues that Nike promoted its sneaker-themed NFTs to attract investors, only to later abandon the project, leaving holders with devalued assets.
The group accuses Nike of selling unregistered securities, stating that the NFTs were marketed in a way that made buyers believe their value would grow based on the company’s branding and promotional efforts. According to the lawsuit, Nike used its global reputation to boost excitement around the NFTs but failed to properly register the digital assets with the Securities and Exchange Commission. The plaintiffs are seeking $5 million in damages, alleging violations of consumer protection and unfair trade laws.
There has yet to be a clear legal decision on whether NFTs are considered securities under US law. However, in a recent communication with the SEC, NFT marketplace OpenSea urged regulators to exempt NFTs from being classified as securities, arguing they don’t meet the traditional definition.
Nike acquired RTFKT Studios in 2021 and rolled out NFT collections tied to virtual sneakers. Buyers were told that owning these NFTs would offer opportunities to participate in quests and challenges that could earn them rewards. Initially, Nike’s NFTs were trading for an average of 3.5 Ether (around $8,000 at the time), but recent data from OpenSea shows they have dropped to about 0.009 Ether, roughly $16.
The lawsuit claims that the shutdown of RTFKT eliminated the benefits promised to NFT holders and crushed the market value of the tokens. This comes amid a broader downturn for the NFT market, with overall sales falling 63% year-over-year in the first quarter of 2025. Nike has not yet commented on the lawsuit.
