Nike is facing a class-action lawsuit after it abruptly shut down its RTFKT unit in December 2024, causing significant financial losses for buyers of Nike-themed NFTs and crypto assets. The plaintiffs, led by Australian investor Jagdeep Cheema, claim that the sudden closure wiped out the value and demand for their digital collectibles, which were sold under the Nike and RTFKT brands
What Happened?
Nike bought RTFKT in December 2021, pitching it as the next big thing in digital fashion and collectibles. RTFKT created Nike-themed NFTs-digital assets that buyers hoped would hold or grow in value.
But in December 2024, Nike abruptly shut down RTFKT. No warning. No clear plan for what would happen to the NFTs or their buyers.
Why Are Buyers Suing Nike?
A group of buyers, led by Australian investor Jagdeep Cheema, filed a class-action lawsuit in New York federal court. Their main claims:
- The sudden shutdown caused their NFTs to lose most-if not all-of their value.
- Nike sold these NFTs as unregistered securities, which is a legal gray area.
- Buyers say they wouldn’t have purchased the NFTs if they’d known about the risks or Nike’s plans to exit.
- The lawsuit seeks over $5 million in damages, citing violations of consumer protection laws in New York, California, Florida, and Oregon.
NFT Problems After Shutdown
- Some NFTs stopped displaying images-buyers saw error messages instead of their digital art.
- This sparked fears that Nike stopped paying for the servers hosting the NFT visuals.
- Many buyers felt abandoned, with no support or recourse.
Legal and Crypto Uncertainty
- The big question: Are NFTs securities? U.S. regulators and courts still haven’t decided.
- This lawsuit could set a precedent for how NFTs are regulated and what protections buyers have.
- Nike hasn’t commented publicly on the lawsuit.
Key Takeaways
- NFT buyers can lose big if a project shuts down without warning.
- Legal protections for NFT investors are still unclear.
- Centralized control over digital assets creates risk-if the company pulls out, buyers may be left with nothing.
- This case could shape future NFT regulations and investor rights.
FAQs
Q: Who is suing Nike?
- A: A group of NFT buyers led by Jagdeep Cheema.
Q: What are they asking for?
- A: Over $5 million in damages for lost value and alleged legal violations.
Q: Why did Nike shut down RTFKT?
- A: No detailed explanation was given. Nike said RTFKT’s spirit would continue through other creators.
Q: What happened to the NFTs?
- A: Many lost value, and some stopped displaying images as server support ended.
Q: Are NFTs securities?
- A: The legal status is still being debated in U.S. courts.
Q: What does this mean for NFT buyers?
- A: If you buy NFTs tied to a company or platform, you risk losing your investment if the project ends or support is pulled.
Q: What blockchain were the Nike RTFKT NFTs on?
- A: The Nike RTFKT NFTs were minted and operated on the Ethereum blockchain.
