- Plaintiffs accuse Nike of promoting unregistered securities.
- NFTs linked to RTFKT fell from $8,000 to $16 after closure.
- Lawsuit highlights legal uncertainty around NFTs as securities.
Nike is facing a $5 million class-action lawsuit that claims the company misled investors by promoting non-fungible tokens (NFTs) tied to its RTFKT platform before abruptly shutting it down.
Filed in Brooklyn federal court on 25 April, the lawsuit accuses Nike of orchestrating a “rug pull” by heavily marketing its sneaker-themed NFTs, encouraging investment, and then closing the platform in January 2025.
The case highlights growing tensions over the classification of NFTs as securities and comes amid a sharp downturn in NFT market value, with total sales plunging 63% year-on-year in the first quarter.
Nike accused of selling unregistered NFTs
The class-action group, led by Jagdeep Cheema, alleges that Nike used its brand recognition and marketing strength to promote NFTs that functioned as unregistered securities.
According to the lawsuit, Nike encouraged purchases by linking the value of the NFTs to the company’s ongoing promotional efforts, leading investors to expect rising asset values tied directly to the brand’s success.
The complaint argues that investors suffered “significant damages” after Nike shuttered RTFKT, destroying the tokens’ value. The suit also claims that Nike violated consumer protection and state competition laws.
It seeks $5 million in damages, citing breaches related to marketing unregistered securities and failing to safeguard investors’ interests after shutting down RTFKT.
Notably, the case highlights the legal uncertainty surrounding NFTs.
Although a United States court has yet to definitively rule on whether NFTs are securities, OpenSea, a major NFT marketplace, argued in an April 9 letter to the Securities and Exchange Commission that NFTs should not fall under securities regulation.
Despite this broader debate, the plaintiffs contend that the court does not need to settle the securities status of NFTs to rule on Nike’s alleged wrongdoing.
Nike NFT values crash after RTFKT shutdown
Nike acquired RTFKT Studios, a virtual sneaker and collectibles firm, in 2021.
Following the acquisition, Nike released the “CryptoKick” NFT collection, which initially traded at an average price of 3.5 Ether (around $8,000) when listed on OpenSea on 18 April 2022.
However, after Nike shuttered RTFKT in January 2025, the average price of these NFTs dropped dramatically.
By 21 April, Nike’s CryptoKick tokens were trading for around 0.009 Ether, or roughly $16.
The lawsuit argues that this collapse in value directly harmed investors who bought NFTs expecting future participation in RTFKT’s challenges and quests, a key component marketed as a reason to invest in the tokens.
The plaintiffs claim that the closure removed promised utility features that underpinned the NFTs’ value proposition, leaving investors without access to previously promoted opportunities for rewards and engagement.
NFT market sales fall 63% in early 2025
The downturn in Nike’s NFT values occurred alongside a broader slump in the NFT market.
Data shows that global NFT sales dropped to $1.5 billion from January to March 2025, marking a 63% fall compared to $4.1 billion in the same quarter of 2024.
This contraction reflects a growing scepticism among investors about the long-term value of NFTs, particularly projects closely tied to brand-driven hype.
Nike’s situation adds to a series of controversies that are challenging assumptions about the sustainability of digital asset markets.
While debates around the regulatory classification of NFTs continue, cases like the Nike lawsuit may test new legal arguments without waiting for formal rulings on securities law status.
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Plaintiffs accuse Nike of promoting unregistered securities. NFTs linked to RTFKT fell from $8,000 to $16 after closure. Lawsuit highlights legal uncertainty around NFTs as securities. Nike is facing a $5 million class-action lawsuit that claims the company misled investors by promoting non-fungible tokens (NFTs) tied to its RTFKT platform before abruptly shutting it down.
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