- Plaintiffs accuse Nike of promoting unregistered securities.
- NFTs tied to RTFKT fell from $8,000 to $16 after the platform was shut down.
- The lawsuit highlights legal uncertainty over whether NFTs qualify as securities.
Nike is facing a proposed class action lawsuit seeking $5 million, alleging the company misled investors by promoting non-fungible tokens (NFTs) connected to its RTFKT platform before abruptly shutting it down.
The lawsuit, filed in federal court in Brooklyn on April 25, accuses Nike of orchestrating a “rug pull” through heavy marketing of sneaker-themed NFTs, encouraging investments, and then closing the platform in January 2025.
The case underscores growing tension around whether NFTs should be classified as securities and comes amid a sharp decline in NFT market value, with total sales in the first quarter down 63% year-over-year.
Nike accused of selling unregistered NFTs
The proposed class action led by Jagdeep Cheema alleges Nike leveraged its brand recognition and marketing power to promote NFTs that functioned as unregistered securities.
According to the complaint, Nike encouraged purchases by linking NFT value to the company’s ongoing promotional efforts, leading investors to expect asset appreciation tied directly to the brand’s success.
The complaint claims investors suffered “substantial losses” after Nike closed RTFKT, which effectively destroyed the tokens’ value. The lawsuit also alleges violations of consumer protection and state unfair competition laws.
Plaintiffs seek $5 million in damages, citing violations related to marketing unregistered securities and failing to safeguard investor interests after the RTFKT shutdown.
The case highlights the legal uncertainty surrounding NFTs.
While U.S. courts have not yet reached a definitive ruling on whether NFTs constitute securities, OpenSea — the largest NFT marketplace — argued in a letter to the Securities and Exchange Commission on April 9 that NFTs should not fall under securities regulation.
Despite this broader debate, the plaintiffs assert the court need not resolve the general 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, which debuted on OpenSea on April 18, 2022, with an average sale price of 3.5 ether (about $8,000 at the time).
However, after Nike closed RTFKT in January 2025, the average price of those NFTs plunged dramatically.
By April 21, the Nike CryptoKick tokens were trading at roughly 0.009 ether, or about $16.
The lawsuit contends this collapse in value directly harmed investors who bought NFTs expecting future participation in RTFKT challenges and tasks — a central utility promoted as a reason to purchase the tokens.
Plaintiffs argue the shutdown eliminated the promised utility that supported the NFTs’ value, leaving investors without access to previously promoted reward opportunities and engagement features.
NFT market sales fell 63% in early 2025
The drop in Nike NFT values occurred alongside a broader market decline.
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.
This decline reflects growing skepticism among investors about the long-term value of NFTs, particularly projects closely tied to brand-driven hype.
Nike’s situation adds to a series of controversies that challenge assumptions about the sustainability of digital asset markets.
As debates over regulatory classification of NFTs continue, lawsuits like the Nike case may test new legal theories without waiting for formal rulings on whether NFTs qualify as securities.