Nike Faces $5 Million Lawsuit for Allegedly Abandoning RTFKT NFT Buyers

The lawsuit, filed in the Eastern District of New York on April 25, claimed that Nike used its brand name to create excitement around sneaker-themed NFTs and encouraged people to buy them.

However, according to the plaintiffs, Nike abandoned the project, which caused the value of the NFTs to fall. Buyers say they were left with digital items that became difficult to sell.

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The plaintiffs, led by Jagdeep Cheema, argued that if they had known the NFTs were not properly registered under US securities laws, or that Nike would eventually pull back from supporting the project, they would not have made purchases at those prices—or at all.

The filing said that Nike failed to provide important information that would have been required if the NFTs had been registered as securities.

The complaint also claimed that even if the NFTs are not seen as securities, Nike still violated consumer protection laws in states like New York, California, Florida, and Oregon. According to the plaintiffs, Nike created an ecosystem of rewards to boost interest, then removed that support without warning, which hurt buyers in the process.

The lawsuit further alleged that Nike collected money from the original sales and from resale fees, while buyers were left to absorb the financial losses.

On April 24, RTFKT ran into trouble after images from its NFTs, Clone X and Animus, suddenly disappeared. How did that happen? Read the full story.