Nike Faces $5 Million Class Action Over Collapse of RTFKT NFT Platform
Nike is facing fresh legal trouble as a proposed class-action lawsuit demands $5 million in damages, accusing the company of violating consumer protection and state trade laws by shutting down its NFT venture, RTFKT.
Filed on April 25 in Brooklyn federal court, the lawsuit is led by RTFKT users including Jagdeep Cheema. They allege that Nike hyped up its sneaker-themed NFTs to attract buyers, only to abandon the project in January, leaving investors with heavy losses. According to the complaint, Nike leveraged its powerful brand to promote the digital assets but ultimately “pulled the rug” on its supporters when it shuttered RTFKT.
The suit further claims the NFTs Nike sold qualify as unregistered securities, violating securities laws by failing to register them with the SEC. “Nike used its iconic reputation and marketing machine to artificially inflate the perceived value of these unregistered securities,” the plaintiffs argue. Buyers, they claim, were led to believe that the NFTs' value would rise as Nike expanded its digital ecosystem.
Notably, the plaintiffs assert the court doesn't need to formally classify NFTs as securities in order to rule on their case, sidestepping a major legal gray area. So far, U.S. courts have not definitively ruled on whether NFTs fall under securities law. Meanwhile, NFT marketplace OpenSea recently urged the SEC to exempt NFTs from such regulation in an April 9 letter, arguing they don’t meet the traditional definition of a security.
Nike’s relationship with RTFKT began in 2021 when it acquired the NFT studio known for designing virtual sneakers. At launch, RTFKT’s Nike-linked NFTs offered not just collectibles, but also promises of exclusive experiences like quests and challenges that could yield further rewards.
When Nike introduced its "CryptoKicks" NFTs in April 2022, they traded for an average of 3.5 ETH (then around $8,000). However, by April 2025, after RTFKT’s shutdown, prices had nosedived to roughly 0.009 ETH—about $16—according to OpenSea data. Investors argue that the collapse stripped them not only of their investments but also of the promised interactive opportunities.
The lawsuit arrives amid a broader slump in the NFT market. In the first quarter of 2025, total NFT sales plunged 63% year-over-year, falling to $1.5 billion from $4.1 billion during the same period in 2024.
As Nike deals with the fallout from RTFKT's closure, the case could mark a major moment in how courts treat NFTs—and how companies are held accountable for their ventures into the digital asset space.