Nike is facing a proposed class-action lawsuit after shutting down its crypto-focused business unit, RTFKT, leaving NFT purchasers claiming significant losses.
Filed on Friday in the Eastern District of New York, the lawsuit is led by Australian resident Jagdeep Cheema. It alleges that Nike’s sudden closure of RTFKT in December 2024 caused the market for Nike-themed NFTs and other digital assets to collapse. Buyers say they were left with assets that lost much of their value overnight.
According to the complaint, the plaintiffs argue they would not have purchased the NFTs at the prices they did—or at all—had they known the tokens were unregistered securities. They also claim that Nike effectively “pulled the rug out from under them” by shutting down the business without proper warning.
Nike, based in Beaverton, Oregon, did not immediately respond to requests for comment. Phillip Kim, the lawyer representing the plaintiffs, also declined to comment.
Buyers are asking for more than $5 million, saying Nike broke consumer protection laws in states like New York, California, Florida, and Oregon.
The case also raises a bigger issue that’s still not fully settled — whether NFTs should be treated like securities under U.S. law. Several lawsuits across the country have raised similar questions as the crypto and NFT markets continue to evolve.
Nike acquired RTFKT (pronounced “artifact”) in December 2021, describing the brand as a pioneer in merging culture, gaming, and digital collectibles. Nike announced on December 2, 2024, that it was shutting down RTFKT. In the announcement, the company said that while RTFKT’s operations were ending, its legacy would continue through the creators and projects it had inspired.
The lawsuit is filed under Cheema v. Nike Inc., in the U.S. District Court for the Eastern District of New York, case number 25-02305.
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