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People who bought Nike’s non-fungible tokens (NFTs) sued the company last week for $5 million after the sportswear giant abruptly shut down its digital platform.
The proposed class-action lawsuit, filed April 25 in Brooklyn federal court, accuses Nike of executing a “soft rug pull” by abruptly closing RTFKT operations in December 2024, causing NFT values to plummet.
Australian resident Jagdeep Cheema leads the plaintiffs. The buyers say Nike sold these digital tokens without telling them about the risks. The suit argues Nike used “its iconic brand and marketing prowess to hype, promote, and prop up the unregistered securities that RTFKT sold.”
“Plaintiff and others would never have purchased the Nike NFTs at the prices they did, or at all, had they known that the Nike NFTs were unregistered securities or that Nike would cause the rug to be pulled out from under them,” the complaint states.
Nike bought RTFKT (pronounced “artifact”) in December 2021 during the NFT boom. The platform created virtual sneakers and collectibles, with some tokens reportedly selling for “six-figure sums,” according to court documents. The company promoted these digital assets as having utility through rewards and challenges.
When Nike announced RTFKT’s closure, secondary market prices collapsed. Nike’s “Cryptokicks” NFTs, which once traded for around $8,000 in April 2022, fell to roughly $16 by April 2025, according to data from OpenSea.
The case spotlights ongoing uncertainty about how NFTs should be classified under U.S. securities laws. No court has definitively ruled whether NFTs qualify as securities requiring SEC registration.
Just last month, cryptocurrency marketplace OpenSea urged the SEC to exclude NFTs from federal securities laws. The company argued in a letter dated April 9 that digital collectibles do not meet the legal definition of investment securities.
The lawsuit claims violations of consumer protection laws in New York, California, Florida, and Oregon. It seeks to represent all RTFKT NFT purchasers.
“One does not expect it from Nike,” the complaint reads, “the international sports juggernaut with yearly revenue of around $50 billion. But that is what Nike did.”
Nike has not responded to requests for comment.
This case follows similar legal action against other companies. DraftKings recently paid $10 million to settle claims from customers after closing its own NFT marketplace.
