TLDR
- Nike is being sued for over $5 million by buyers of its RTFKT NFTs after shutting down the platform in January 2025
- The lawsuit claims the NFTs were “unregistered securities” and alleges violations of consumer protection laws
- Nike acquired RTFKT in 2021 to enter the NFT market but announced its closure in December 2024
- The value of Nike’s “Crypto Kicks” NFTs plummeted from around $8,000 in April 2022 to roughly $16 by April 2025
- The plaintiffs claim they would not have purchased the NFTs if they had known Nike would abandon the project
Nike is facing a proposed class-action lawsuit seeking over $5 million in damages following its decision to shut down RTFKT, its NFT platform. The lawsuit was filed this week in New York’s Eastern District court by a group of buyers led by Jagdeep Cheema.
The sportswear giant acquired RTFKT in 2021 during the NFT boom. This move was part of Nike’s strategy to capitalize on the growing digital asset trend by offering virtual sneakers and other digital collectibles.
According to the lawsuit, Nike used “its iconic brand and marketing prowess” to promote the NFTs, which the plaintiffs now claim were “unregistered securities.” The buyers argue they wouldn’t have purchased these digital assets had they known Nike would later abandon the project.
The Rise and Fall of RTFKT
RTFKT was known for creating virtual sneakers and other digital assets that could be traded on secondary markets. Nike announced plans to “wind down RTFKT operations” in December 2024, with the complete shutdown occurring by the end of January 2025.
The value of Nike’s “Crypto Kicks” NFT collection has seen a dramatic decline. When first listed in April 2022, these digital assets traded for an average of 3.5 Ether, worth approximately $8,000 at the time.
By April 2025, these same NFTs were trading for about 0.009 Ether, or roughly $16. This represents a 99.8% loss in value for investors.
The lawsuit claims that Nike promised holders could use the tokens to complete challenges and quests that would lead to rewards. When Nike shut down the platform, these opportunities vanished.
Legal Implications for NFTs
The plaintiffs accuse Nike of violating consumer protection laws in multiple states, including New York, California, Florida, and Oregon. They argue that Nike sold unregistered securities without registering with the Securities and Exchange Commission (SEC).
The legal status of NFTs remains unclear in the United States. No court has definitively ruled on whether NFTs qualify as securities under federal law.
OpenSea, a major NFT marketplace, recently urged the SEC to exclude NFTs from federal securities laws. In an April 9 letter, they argued that NFTs don’t meet the legal definition of a security.
The lawsuit against Nike states that the court doesn’t necessarily need to determine whether NFTs are securities to address their complaint. The focus is on Nike’s alleged violations of consumer protection laws.
Since the shutdown, RTFKT appears to have been maintained by a single person named Samuel Cardillo. He recently dealt with technical issues that caused the temporary disappearance of artwork for the CloneX NFTs project.
The broader NFT market has seen a sharp decline in 2025. Total sales dropped 63% year-over-year, with $1.5 billion in sales from January to March 2025, compared to $4.1 billion during the same period in 2024.
Nike has not yet responded to requests for comment on the lawsuit. The case represents one of the first major legal challenges involving a mainstream brand’s exit from the NFT space.
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