Nike is being accused of defrauding its NFT investors after the sudden shutdown of its crypto division RTFKT, with the company facing a class action lawsuit in the United States.
The plaintiffs, led by Australian Jagdeep Cheema, are claiming over $5 million in damages, citing violations of consumer protection laws in New York, California, Florida, and Oregon.
The complaint, filed in a federal court in Brooklyn on April 25, accuses Nike of selling unregistered securities in the form of NFTs before “pulling the rug out from under” buyers by abruptly shutting down RTFKT.
According to the plaintiffs, if the risks had been properly disclosed, they would never have invested in these digital tokens or would have done so at much lower prices.
This unexpected shutdown drastically depreciated the value of NFTs linked to RTFKT, leaving many buyers uncertain.
Nike acquired RTFKT in December 2021, applauding its innovative approach blending fashion, culture, and the gaming universe.
However, on December 2, 2024, the sports equipment company quietly announced the end of the RTFKT integration process, stating that the legacy of the brand would survive through other creators and projects.
The case raises a question in the U.S. crypto world: should NFTs be considered securities subject to American regulation?
The Nasdaq is putting pressure on the SEC to enforce this regulation.
For now, Nike has not commented on the case and the plaintiffs’ lawyer, Phillip Kim, has also remained silent.
