Nike, a popular American sportswear brand, is facing a class-action lawsuit for allegedly operating a “rug pull” by shutting down its RTFKT NFT platform. A group of investors filed the Nike lawsuit in a Brooklyn federal court, alleging that the NFT shutdown led to significant financial losses.
Notably, the lawsuit claims that the sportswear giant touted its sneaker-themed non-fungible tokens (NFTs) to gain investors and abruptly closed the platform, causing damages exceeding $5 million.
Nike Faces $5M Lawsuit: What’s Happening?
A group of RTFKT NFT investors filed a lawsuit against the sportswear behemoth, Nike, for allegedly executing a “soft rug pull,” causing millions of losses. Reportedly, Nike used its reputation to hype the NFTS connected to its digital fashion and technology platform, RTFKT. Subsequently, Nike closed the RTFKT platform, causing the digital collectibles to plummet in value and leaving investors with substantial losses.
Further, the plaintiffs claimed that they bought the NFTs anticipating their future growth as they were tied to the sportswear company’s popularity. “Because the Nike NFTs derived their value from the success of a given promoter and project — here, Nike and its marketing efforts — investors purchased this digital asset with the hope that its value would increase in the future as the project grows in popularity based on the Nike brand,” claimed the lawsuit.
This development comes amid the increasing anticipation of swift action in the prolonged XRP lawsuit.
Are RTFKT NFTs Securities?
Moreover, the Nike lawsuit argues that the RTFKT NFTs are “unregistered securities.” Significantly, Nike is accused of violating US law by selling unregistered securities in the form of NFTs, hyping them up with marketing, only to pull the plug after profiting.
The plaintiffs demand $5 million in damages, arguing that the sportswear giant breached consumer protection laws and other state unfair trade and competition laws.
Although the US court hasn’t yet classified NFTs as securities, debates are ongoing in the industry. On April 9, 2025, OpeaSea has requested the US SEC to exclude NFTs from federal securities laws. Their argument is based on the reported fact that NFTs do not meet the legal definition of a security. However, in the Nike lawsuit, the class group said that the court doesn’t need to determine the legal status of NFTs to resolve the complaint.
Recently, the US Securities and Exchange Commission shared renewed guidance on the classification of digital assets as securities.
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