Crypto Investors Sue Nike, Accuse Apparel Giant of Rug Pull After Abrupt Closure of Metaverse Business: Report

Sportswear big Nike is reportedly going through a lawsuit following the closure of its non-fungible token (NFT) enterprise.

In 2021, Nike purchased RTFKT Studios, a collectibles agency recognized for creating viral sneaker designs, memes and different modern digital collectibles because it ventured into the metaverse, however the firm shut down the undertaking in December.

Reuters reports that traders of Nike-themed NFTs and different crypto belongings led by Australian resident Jagdeep Cheema filed a go well with on Friday, claiming that they suffered vital losses as demand for his or her digital collectibles dropped following the announcement that RTFKT was winding down its operations.

The traders say that they’d not have purchased the NFTs had they recognized that the tokens have been unregistered securities. Up to now, the authorized standing of NFTs isn’t but settled, and several other lawsuits contain questions on whether or not or not these belongings ought to be thought-about as securities. 

The go well with additionally accuses Nike of orchestrating a “rug pull”, or the sudden abandonment of a undertaking that leaves traders with nugatory belongings.

The plaintiffs are in search of greater than $5 million in damages for the alleged violation of client legal guidelines in New York, California, Florida and Oregon.

Nike has not but issued a press release relating to the lawsuit.

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