Nike is under legal fire after shuttering its crypto and digital collectibles arm, RTFKT, in late 2024—a move that has triggered a class-action lawsuit from disgruntled investors. The suit alleges that Nike misled consumers about the long-term viability and value of its non-fungible tokens (NFTs), many of which were purchased under the belief that the company would continue to support and grow its presence in the Web3 space.
The plaintiffs, led by Australian investor Jagdeep Cheema, argue that Nike encouraged customers to buy into RTFKT’s digital products—some of which sold for thousands of dollars—without disclosing that these assets were, in their view, unregistered securities. They claim that Nike’s decision to shut down RTFKT without warning caused the value of their digital holdings to collapse, leaving buyers holding assets that are now functionally worthless.
The lawsuit is seeking over $5 million in damages and cites violations of consumer protection laws across multiple states. Plaintiffs allege that Nike’s actions amount to a “rug pull”—a term used in the crypto world to describe a project that abruptly exits, leaving investors stranded.
RTFKT, which Nike acquired in 2021, was once considered a bold bet on the future of digital fashion and the metaverse. The brand collaborated on virtual sneakers, NFT wearables, and other blockchain-based collectibles, some of which had a significant resale market. Nike heavily marketed the brand to its younger, tech-savvy consumers, positioning it as the future of digital ownership and community-based product experiences.
But according to the lawsuit, that future was cut short without accountability. The plaintiffs claim Nike continued to promote and sell NFTs through RTFKT well into 2024—only to then announce its closure with little notice or recourse for existing holders.
Critics of Nike’s crypto experiment say the situation highlights the risks of major corporations entering emerging, loosely regulated markets like NFTs without clear investor protections. Meanwhile, legal experts are watching the case closely, as it could help define whether certain NFTs should be treated as securities under U.S. law.
For now, Nike has not issued a public response to the lawsuit. The case is likely to test not only how traditional legal frameworks apply to digital assets, but also the extent to which brands are responsible for the afterlife of their crypto products once they exit the space.
