The swoosh just became embroiled in a legal debacle, with disgruntled NFT investors seeking reparation. Nike is facing a class-action suit in Brooklyn regarding the downfall of RTFKT, its prominent NFT venture. Investors contend that Nike inflated expectations for the platform only to shut it down, leaving them with substantial losses. The allegations include false advertising and the sale of unregistered securities.

This lawsuit revives scrutiny on the NFT market.

NFT Holders vs. Nike

Recall the rise of NFTs? It appears they’ve quickly faded from memory. The original goal of NFTs seemed to create digital ownership proofs, akin to transferrable assets. However, they’ve become reminiscent of insidious memes.

Rug Pull Accusation Ignites Controversy

When Nike dismantled RTFKT, it did more than just cease operations; it obliterated its core features, once deemed valuable. Assets tied to these NFTs, which had reached trading values of 3.5 ETH (approximately $8,000) in 2022, have plummeted to 0.009 ETH, roughly $16.

The lawsuit claims, “Because the Nike NFTs gained value from Nike’s popularity and marketing efforts, investors purchased this digital asset hoping for future growth.”

Nike’s actions are characterized by plaintiffs as a classic rug pull, profiting off the hype before abandoning investors as interest waned. The NFT marketplace OpenSea has already implored the SEC to keep NFTs exempt from securities laws, but lawsuits like this indicate ongoing uncertainty that stifles both creators and purchasers.

As the NFT market is in decline, global sales have fallen 63% in Q1 2025, dropping from $4.1 billion to $1.5 billion. Nike’s venture, launched amid enthusiasm in 2021, succumbed just three years later, adding to the list of failures plaguing the NFT space.

What Lies Ahead for Nike’s NFT Lawsuit?

With damages estimated at $5 million and questionable trading practices raised in New York, California, and Oregon, the stakes are substantial—not only for Nike but also for potential forthcoming NFT projects. This case could establish new legal standards, compelling companies to reevaluate the management of NFT initiatives and their obligations to purchasers.

Key Takeaways

• Nike is facing a class-action lawsuit in Brooklyn over the collapse of RTFKT, its well-known NFT venture.
• The plaintiffs are seeking $5 million in damages, reflecting the massive losses attributed to Nike’s conduct.