Nike Sued Over Closure of Crypto Business Linked to NFTs

Nike is going through a proposed class-action lawsuit after shutting down its crypto-focused enterprise unit, RTFKT, leaving NFT purchasers claiming vital losses.

Filed on Friday within the Japanese District of New York, the lawsuit is led by Australian resident Jagdeep Cheema. It alleges that Nike’s sudden closure of RTFKT in December 2024 triggered the marketplace for Nike-themed NFTs and different digital belongings to break down. Patrons say they have been left with belongings that misplaced a lot of their worth in a single day.

In keeping with the grievance, the plaintiffs argue they’d not have bought the NFTs on the costs they did—or in any respect—had they recognized the tokens have been unregistered securities. Additionally they declare that Nike successfully “pulled the rug out from below them” by shutting down the enterprise with out correct warning.

Nike, primarily based in Beaverton, Oregon, didn’t instantly reply to requests for remark. Phillip Kim, the lawyer representing the plaintiffs, additionally declined to remark.

Patrons are asking for greater than $5 million, saying Nike broke client safety legal guidelines in states like New York, California, Florida, and Oregon.

The case additionally raises a much bigger challenge that’s nonetheless not absolutely settled — whether or not NFTs ought to be handled like securities below U.S. legislation. A number of lawsuits throughout the nation have raised comparable questions because the crypto and NFT markets proceed to evolve.

Nike acquired RTFKT (pronounced “artifact”) in December 2021, describing the model as a pioneer in merging tradition, gaming, and digital collectibles. Nike introduced on December 2, 2024, that it was shutting down RTFKT. Within the announcement, the corporate mentioned that whereas RTFKT’s operations have been ending, its legacy would proceed via the creators and tasks it had impressed.

The lawsuit is filed below Cheema v. Nike Inc., within the U.S. District Court docket for the Japanese District of New York, case quantity 25-02305.