Nike Sued by NFT Holders Over "Rug Pull" Shutdown of RTFKT Platform

Class-Action Lawsuit Alleges Violation of Securities Laws and Consumer Protections

Holy smokes, folks! A group of fiery NFT holders just dropped the hammer on Nike with a class-action lawsuit over the sudden shutdown of its RTFKT platform. These folks are not messing around!

According to court docs filed in the U.S. District Court for the Eastern District of New York, the plaintiffs are calling out Nike for pulling a classic "rug pull." They say Nike hyped up these sneaker-themed NFTs, raked in the cash from initial and secondary sales, and then slammed the door on RTFKT in January 2025, leaving investors holding the bag with massive losses and NFTs that are now about as valuable as a broken shoelace.

This lawsuit, led by RTFKT holder Jagdeep Cheema, is going for the jugular, seeking a cool $5 million in damages and demanding a jury trial to settle the score. They're accusing Nike of breaking consumer protection laws and peddling unregistered securities like it's nobody's business.

The plaintiffs are putting Nike's NFTs under the microscope, claiming they meet the criteria for securities under the Howey Test. They say buyers dropped some serious cash into a shared venture, expecting to rake in profits thanks to Nike's efforts. But guess what? Nike never bothered to register these bad boys as securities.

"As this type of digital asset is properly classified as a security under relevant law, the issuers of this type of token are required to register them and file relevant statements with the authorities and comply with relevant securities laws. The Nike NFTs were never registered as such," the lawsuit boldly declares.

Let's rewind a bit. Nike scooped up RTFKT back in December 2021, right at the peak of NFT mania. They were all about diving headfirst into the digital world, and at the time, RTFKT was the talk of the town for mixing fashion, gaming, and blockchain tech in a way that had the crypto and sneaker communities buzzing.

The studio quickly became the life of the party, with projects like CloneX and Cryptokicks bringing in millions in sales. Early buyers were promised a wild ride with quests, forging events, and exclusive drops that tied digital collectibles to real-world goodies.

But as the NFT market started to cool off in 2023 and 2024, the hype around RTFKT's collections began to fizzle out.

Then, in December 2024, Nike dropped the bombshell that RTFKT would be shutting down after one last hurrah, the "Blade Drop." They tried to spin it as a way to preserve RTFKT's legacy, but the plaintiffs ain't buying it.

They argue that Nike's sudden withdrawal sent the value of these NFTs plummeting, many of which were once trading for thousands of dollars. Poof! Gone were the promised ecosystem features like quests, rewards, and exclusive access to limited-edition products.

Nike and RTFKT had been hyping up these NFTs with promises of peer-to-peer trading and a lively ecosystem where completing challenges and forging sneakers would add real value. But after the shutdown, those features vanished into thin air, the secondary market dried up faster than a desert, and NFT prices crashed harder than a sneaker on a hardwood floor.

"Predictably, prices plunged and did not recover. Investors – some of whom are cited in this complaint – and the crypto community at large lamented Nike's brazen rug pull," the lawsuit adds, dropping the mic on Nike's alleged shenanigans.