- Plaintiffs accuse Nike of promoting unregistered securities.
- NFTs tied to RTFKT plunged from $8,000 to $16 after the platform was shut down.
- The lawsuit highlights legal uncertainty around whether NFTs qualify as securities.
Nike is facing a proposed class action seeking $5 million, alleging the company misled investors by aggressively promoting non-fungible tokens (NFTs) linked to its RTFKT platform and then abruptly shutting that platform down.
Filed on April 25 in federal court in Brooklyn, the complaint accuses Nike of orchestrating a “rug pull” by heavily marketing sneaker-themed NFTs, encouraging purchases, and then closing RTFKT in January 2025.
The case underscores the growing friction over how NFTs should be classified under securities laws and comes amid a broad decline in NFT market values, with overall sales in the first quarter falling sharply year over year.
Allegation: Nike sold unregistered NFTs as securities
Lead plaintiff Jagdeep Cheema and the putative class claim that Nike leveraged its brand recognition and marketing power to promote NFTs that functioned as unregistered securities.
According to the complaint, Nike tied the perceived value of the tokens to the company’s ongoing promotional activities, leading investors to believe that rising token values were directly connected to the brand’s success and future initiatives.
The plaintiffs contend investors suffered “substantial damages” when Nike closed RTFKT and, they say, effectively destroyed the value of the tokens. The complaint also accuses Nike of violating consumer protection statutes and state competition laws.
Seeking $5 million in damages, the suit is based on alleged unlawful marketing of unregistered securities and the claim that Nike failed to protect investors’ interests after RTFKT’s closure.
The case particularly highlights the legal uncertainty surrounding NFTs.
No U.S. court has definitively ruled that NFTs are securities. Major marketplaces such as OpenSea have urged the Securities and Exchange Commission not to classify NFTs under securities regulations.
Despite the broader debate, the plaintiffs argue the court does not need to resolve the securities status of NFTs to adjudicate Nike’s alleged misconduct.
Nike NFT values collapse after RTFKT shutdown
Nike acquired RTFKT Studios, a maker of virtual sneakers and collectibles, in 2021.
After the acquisition, Nike released the “CryptoKick” NFT collection. When CryptoKicks first appeared on OpenSea on April 18, 2022, they traded at an average price of about 3.5 Ether—roughly $8,000 at the time.
Following Nike’s closure of RTFKT in January 2025, the average price of those NFTs fell dramatically.
By April 21, the CryptoKick tokens were trading for approximately 0.009 Ether—around $16.
The complaint argues that this collapse directly harmed investors who had purchased the NFTs expecting to participate in RTFKT’s ongoing drops, challenges, and community activities—features prominently marketed as integral to the tokens’ value proposition.
Plaintiffs say the promised utilities and access that underpinned the NFTs’ value were eliminated when RTFKT was shut down, leaving token holders without the advertised opportunities for rewards and engagement.
NFT market sales drop 63% in early 2025
Nike’s NFT decline occurred alongside a broad downturn in the NFT market.
Data show global NFT sales fell to $1.5 billion from January through March 2025, a 63% decrease compared with $4.1 billion in the same quarter of 2024.
That drop signals growing investor skepticism about the long-term value of NFTs, particularly projects closely tied to brand-driven hype and ongoing promotional activity.
Nike’s situation is one of several controversies prompting questions about the sustainability of digital-asset markets.
As debates over how to regulate NFTs continue, lawsuits like the one against Nike could test new legal arguments without waiting for a formal judicial determination on whether NFTs qualify as securities.