Nike Faces $5M Lawsuit Over NFT Platform Shutdown

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Nike is confronting a proposed class-action lawsuit alleging the company orchestrated a “rug pull” by abruptly shutting down its NFT platform, RTFKT, earlier this year.

The complaint, filed in Brooklyn federal court on April 25, accuses the sportswear giant of misleading investors by promoting sneaker-themed NFTs before discontinuing the project—leaving holders with “significant damages.”

Lead plaintiff Jagdeep Cheema and other RTFKT users argue that Nike violated securities laws by selling unregistered NFTs, which they claim functioned as investment contracts.

The lawsuit asserts that Nike leveraged its brand power to artificially inflate the value of the digital assets, only to abandon the project without warning.

The plaintiffs seek $5 million in damages, alleging violations of consumer protection laws and state unfair competition statutes. If certified, the case could set a precedent for how regulators and courts treat celebrity- or brand-backed NFTs.