Nike Inc. has been hit with a proposed class-action lawsuit on Friday by purchasers of its Nike-themed non-fungible tokens (NFTs) and related crypto assets, who claim they suffered major financial losses following the abrupt shutdown of Nike’s RTFKT unit.
Filed in the US District Court for the Eastern District of New York, the lawsuit alleges that Nike misled buyers about the security and value of its NFTs.
Led by Australian resident Jagdeep Cheema, the plaintiffs argue that Nike’s NFTs constituted unregistered securities and that they would not have purchased them had they been aware of the regulatory risks or the planned closure of RTFKT.
Nike, headquartered in Beaverton, Oregon, did not immediately respond to requests for comment. Lawyers for the plaintiffs also declined to comment.
The RTFKT unit, which Nike acquired in December 2021, was marketed as a cutting-edge digital fashion brand blending gaming, culture, and innovation.
However, Nike announced RTFKT’s winddown on December 2, 2024, stating that the innovation it fostered would continue through external creators and projects.
Plaintiffs are seeking more than $5 million in damages for alleged violations of consumer protection laws in New York, California, Florida, and Oregon.
The complaint accuses Nike of “pulling the rug out” from under NFT purchasers and failing to properly register the tokens as securities under US law.
The legal status of NFTs remains unsettled, with several lawsuits nationwide questioning whether digital collectibles should be regulated as securities.
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