Nike Faces $5 Million Lawsuit Over RTFKT NFT Shutdown

Nike is embroiled in a $5 million class action lawsuit filed by NFT buyers who allege significant financial losses following the unexpected closure of Nike’s RTFKT digital asset division in December 2024. The plaintiffs, led by Jagdeep Cheema, claim the shutdown caused a sharp drop in the value and demand for their Nike-themed NFTs.

• Nike sued for $5M over RTFKT NFT value drop
• Shutdown in December 2024 caused financial losses
• Lawsuit filed in New York, alleging consumer protection law violations

The lawsuit, filed on April 27, 2024, in New York, seeks damages for alleged violations of consumer protection laws in New York, California, Florida, and Oregon. The plaintiffs argue that Nike’s decision to shut down RTFKT, a company it acquired in December 2021 to merge technology and cultural trends, was unexpected and led to a sharp decline in their NFT investments.

Non-Fungible Tokens (NFTs) are unique digital assets that use blockchain technology to establish ownership and authenticity. RTFKT, a digital asset company specializing in creating innovative NFTs, was acquired by Nike with high hopes of leading the next generation of digital collectibles. However, the sudden closure of RTFKT in December 2024 left investors feeling blindsided and betrayed.

Despite the division’s closure, Nike remains optimistic, stating, “Although RTFKT officially closed in December 2024, Nike emphasized that its impact would continue through the countless creators and projects it inspired.” This sentiment, while hopeful, does little to soothe the investors who now face substantial financial setbacks.

The legal status of NFTs remains a contentious issue, with ongoing debates about whether they should be classified as securities. This uncertainty adds another layer of complexity to the situation, as investors grapple with the volatility and regulatory ambiguity of the NFT market.

In response to the plight of affected investors, the Rosen Law Firm announced an investigation into potential claims on March 24, 2025. The firm aims to help those who purchased Nike-themed NFTs issued by RTFKT recover their losses, highlighting the seriousness of the situation and the potential for a broader legal battle.

This case could set a precedent for how NFT-related disputes are handled in the future, impacting both investors and companies involved in the digital asset space. The outcome will be closely watched, as it may influence the direction of the NFT market and the regulatory framework surrounding it.

While Nike’s venture into NFTs was ambitious, aiming to blend advanced technology with cultural phenomena, the sudden closure of RTFKT serves as a stark reminder of the risks and challenges in this new market. As the lawsuit progresses, it will be crucial for both sides to navigate the legal complexities and address the concerns of investors who feel betrayed by the turn of events.

Imagine investing in a digital sneaker, only to find its value plummeting overnight due to a corporate decision. This is the reality for many who bought into Nike’s NFT dream, which turned into a nightmare for investors.

The Lawsuit Details

The class action lawsuit, led by Australian resident Jagdeep Cheema, seeks over $5 million in damages. The plaintiffs claim that Nike’s sudden shutdown of RTFKT led to a significant drop in the value and demand for their NFTs, causing considerable monetary losses. The lawsuit alleges violations of consumer protection laws across multiple states, including New York, California, Florida, and Oregon.

Following the RTFKT shutdown, the value of Nike-themed NFTs dropped by an average of 70%, according to market analysis. This drastic decline underscores the volatility of the NFT market and the impact of corporate decisions on digital asset values.

Nike’s Response

Nike’s official statement on the RTFKT shutdown emphasizes the company’s belief in the continued impact of the division through inspired creators and projects. While this perspective highlights Nike’s optimism, it fails to address the immediate concerns of investors who have suffered financial losses.

Nike’s attempt to merge cutting-edge technology with cultural trends through RTFKT was a bold move, but the closure raises questions about the company’s commitment to its NFT investors. The optimism expressed by Nike does little to mitigate the frustration and anger felt by those who invested in the promise of digital collectibles.

Broader Implications for NFTs

The legal status of NFTs remains a hot topic, with many questioning whether they should be classified as securities. This uncertainty complicates the situation for investors and could influence the outcome of the lawsuit against Nike. Legal experts suggest that the case’s outcome could set a precedent for future NFT-related disputes, affecting how both investors and companies navigate the digital asset space.

The closure of RTFKT and the subsequent lawsuit have damaged Nike’s reputation within the digital asset community. Many investors feel betrayed by the lack of notice or compensation, which could have lasting effects on Nike’s brand image in the crypto world.

Other companies have navigated the NFT space with varying degrees of success. For example, some have launched successful NFT initiatives that have maintained or even increased in value, highlighting the potential and pitfalls of digital assets. This broader market context provides a balanced view of the NFT landscape and underscores the importance of due diligence and transparency.

The future of NFTs may depend on regulatory clarity, which could stabilize the market and protect investors. As the legal and regulatory framework evolves, it will be crucial for companies to consider the impact of their decisions on their NFT communities.

Key Takeaways and Questions

• What led to the lawsuit against Nike?

  The lawsuit was filed by NFT buyers who experienced significant financial losses after Nike shut down its RTFKT digital asset division in December 2024, causing a collapse in the value and demand for their Nike-themed NFTs.

• Who is leading the class action lawsuit against Nike?

  The class action lawsuit is led by Jagdeep Cheema, an Australian resident.

• What is the total amount of damages sought in the lawsuit?

  The lawsuit seeks over $5 million in damages for alleged violations of consumer protection laws.

• What was the purpose of Nike’s acquisition of RTFKT?

  Nike acquired RTFKT in December 2021 with the aim of merging cutting-edge technology and cultural trends to create the next generation of collectibles.

• What is the current legal status of NFTs?

  The legal status of NFTs remains unclear, with ongoing debates about whether they should be considered securities.

• What actions has Rosen Law Firm taken regarding the Nike NFT issue?

  Rosen Law Firm announced an investigation in March 2025 into potential claims on behalf of buyers of Nike-themed NFTs issued by RTFKT, aiming to help investors recover losses.

• How does Nike view the closure of RTFKT?

  Despite the official closure of RTFKT in December 2024, Nike believes its impact will continue through the countless creators and projects it inspired.

“The lawsuit, filed on Friday, seeks over $5 million in damages for violations of consumer protection laws in New York, California, Florida, and Oregon.” – Reuters

“Although RTFKT officially closed in December 2024, Nike emphasized that its impact would continue through the countless creators and projects it inspired.” – Nike

“Rosen Law Firm, a global investor rights law firm, announced an investigation into potential claims on behalf of buyers of the Nike-themed NFTs issued by RTFKT.” – Rosen Law Firm