Nike faces $5 million class-action lawsuit over NFT collapse

Nike is facing serious legal trouble. A $5 million class-action lawsuit has been filed in the U.S. District Court for the Eastern District of New York, accusing the sportswear giant of misleading customers through its digital brand, RTFKT. Buyers claim they were sold non-fungible tokens (NFTs) that should have been registered as securities.

Back in 2021, Nike made headlines by acquiring RTFKT, a company known for creating sneaker-themed NFTs. The idea was bold: blend the world of collectible sneakers with the rising metaverse. Buyers could trade these digital sneakers, show them off online, and even "wear" them with their avatars.

But in late 2024, Nike abruptly announced RTFKT was shutting down. The news sent NFT values crashing almost overnight, leaving thousands of investors out of pocket.

What the Lawsuit Says

Lead plaintiff Jagdeep Cheema, who lives in Australia, argues that Nike never properly warned customers about the risks involved.

The lawsuit says Nike broke consumer protection laws in New York, California, Florida, and Oregon by using deceptive marketing tactics.

Buyers believed their NFTs would climb in value alongside Nike's digital push. Instead, the sudden collapse blindsided collectors and caused major financial hits.

If the court rules that Nike's NFTs should have been treated as securities, it could change everything for the NFT industry. Companies would need to rethink how they market digital assets and possibly register them with regulators.

For lawyers, blockchain businesses, and corporate advisors, this case is one to watch closely. It could rewrite the playbook for how digital collectibles are handled legally.