Nike Sued Over RTFKT NFT Shutdown
- Nike withdraws from its crypto venture, sparking a lawsuit.
- Class-action: Investors allege unregistered securities activity.
- NFT values drop 80%, sparking heavy investor losses.
Nike, Inc. is facing a class-action lawsuit following the abrupt shutdown of its RTFKT crypto business announced on December 2, 2024. Investors, led by Jagdeep Cheema, are seeking over $5 million in damages in the Eastern District of New York.
The lawsuit’s impact extends beyond financial losses, questioning NFT market stability amid growing digital asset scrutiny. There is no immediate reaction from broader crypto markets, though NFT valuation saw an isolated dip.
Nike acquired RTFKT in December 2021 to strengthen its presence in digital assets. The recent shutdown announcement has led investors to sue, citing alleged unregistered securities. Nike, however, has yet to comment on the litigation or RTFKT’s operational closure.
The lawsuit accuses Nike of misleading investors over the nature of RTFKT NFTs, claiming sudden project abandonment. NFT collectors report defective assets following the December notice, adding to the controversy surrounding the closure.
“Plaintiff and others would never have purchased the Nike NFTs at the prices they did, or at all, had they known that the Nike NFTs were unregistered securities or that Nike would cause the rug to be pulled out from under them,” said Jagdeep Cheema, Lead Plaintiff.
Financial repercussions for token holders include a drop of over 80% in RTFKT/Nike NFT prices. The wider market, including leading cryptocurrencies like ETH and BTC, remains unaffected by this specific dispute. Broader NFT market indicators show minimal sector disruption.
The case has broader implications for the classification of NFTs as securities, questioning regulatory definitions. While Nike remains silent, ongoing SEC scrutiny may influence future rulings. Industry experts await the lawsuit’s outcome for possible precedents in digital asset governance and market trust.
The incident highlights regulatory uncertainties within the NFT sector, urging clearer guidelines. The fallout from Nike’s decision could inform future technological, legal, and market dynamics, impacting investor confidence in digital collectibles.
