Nike Sued For NFT Fraud: Millions Of Dollars At Stake

Nike is in turmoil. Accused of abandoning its NFT investors after the sudden shutdown of its crypto division RTFKT, the sports giant faces a class action lawsuit in the United States. More than $5 million is being claimed for deceptive practices and sale of unregistered securities.

Nike sued after shutting down its crypto unit RTFKT

Nike faces a class action lawsuit in the United States after abruptly shutting down RTFKT, its division specialized in NFTs and crypto assets. The plaintiffs, led by Australian Jagdeep Cheema, are claiming over $5 million in damages, citing violations of consumer protection laws in New York, California, Florida, and Oregon.

The complaint, filed in a federal court in Brooklyn on April 25, accuses Nike of selling unregistered securities in the form of NFTs before “pulling the rug out from under” buyers by abruptly shutting down RTFKT. According to the plaintiffs, if the risks had been properly disclosed, they would never have invested in these digital tokens or would have done so at much lower prices.

The NFT market shaken again!

This unexpected shutdown drastically depreciated the value of NFTs linked to RTFKT, leaving many buyers uncertain. The case also raises a burning question in the crypto world: should NFTs be considered securities subject to American regulation? The Nasdaq is precisely putting pressure on the SEC to enforce this regulation. For now, Nike has not commented on the case and the plaintiffs’ lawyer, Phillip Kim, has also remained silent.

As a reminder, Nike acquired RTFKT in December 2021, applauding its innovative approach blending fashion, culture, and the gaming universe. But on December 2, 2024, the sports equipment company quietly announced the end of the RTFKT integration process, stating that the legacy of the brand would survive through other creators and projects.

This lawsuit against Nike thus illustrates the growing challenges that major brands face when venturing into the still unclear and risky NFT and crypto sector. The outcome of this case could well influence the future regulation of digital assets in the United States, which we hope will be favorable under Paul Atkins's leadership.