Nike faces $5M lawsuit over shutdown of NFT project RTFKT

Nike is facing a class action lawsuit from investors who claim the company caused significant financial losses by abruptly shutting down RTFKT, its Web3-focused subsidiary acquired in 2021.  

The plaintiffs allege that Nike promoted unregistered securities through RTFKT NFTs and then abandoned the project without notice, leading to a sharp collapse in the value of Nike-branded digital assets.  

According to court documents filed in the Eastern District of New York, investors argue that Nike used its brand and marketing power to hype NFT sales during the crypto boom, encouraging purchases based on promises of exclusive rewards and profitable resales.  

“Because the Nike NFTs derived their value from the success of a given promoter and project – here, Nike and its marketing efforts – investors purchased this digital asset with the hope that its value would increase in the future as the project grows in popularity based on the Nike brand,” the lawsuit states.

With RTFKT’s closure in January 2025, these incentives vanished, leaving investors with assets that rapidly lost value.  

The plaintiffs contend that Nike NFTs qualify as securities under federal law and that Nike failed to register them with the U.S. Securities and Exchange Commission or disclose associated risks.  

They argue they would not have purchased the NFTs at the prices paid if they had known the true risks involved.  

The lawsuit seeks damages exceeding $5 million and alleges violations of consumer protection laws in New York, California, Florida, and Oregon.  

Investor frustrations were further heightened by technical issues in late April that caused Nike-linked NFT images to disappear temporarily, attributed to an unexpected change in a Cloudflare contract.  

Samuel Cardillo, RTFKT’s head of technology, explained the outage was due to Cloudflare moving to a free plan earlier than planned, which disrupted image and video streaming.