A group of investors has filed a class action lawsuit against Nike, claiming that the sports giant abruptly closed its Web3-focused subsidiary, RTFKT, resulting in millions of dollars in losses related to the brand’s digital asset projects.
According to court documents, Nike is accused of “rug pulling” — a term used to describe the sudden withdrawal from a project, leaving investors stranded — when it closed down RTFKT. Plaintiffs allege that Nike capitalized on its global brand reputation and marketing muscle to promote digital assets that, they argue, qualify as unregistered securities. Once the project was abandoned, the market for these assets collapsed, leaving investors holding tokens that rapidly lost value.
The lawsuit contends that Nike exploited the cryptocurrency boom to drive sales of its non-fungible tokens (NFTs), encouraging buyers to invest with the expectation that the value of the NFTs would increase based on Nike’s promotional efforts.
“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.
The investors further argue that the NFTs meet the criteria for securities under federal law. They claim Nike failed to register the digital assets with the U.S. Securities and Exchange Commission (SEC) and neglected to provide necessary disclosures regarding potential risks. Had such disclosures been made, the plaintiffs assert, they would have avoided purchasing the NFTs at what they now describe as inflated prices.
Seeking more than $5 million in damages, the lawsuit alleges violations of consumer protection laws across New York, Oregon, Florida, and California. The plaintiffs are demanding a jury trial.
“As a result of Nike’s promotion of the unregistered securities and its rug pull, Plaintiff and the Class – many of whom are retail investors who lack the technical and financial sophistication necessary to evaluate the risks associated with their investment – have suffered significant damages in an amount to be proven at trial,” the filing states.
Nike stated in December 2024 that it intended to shut down RTFKT in order to uphold the brand’s heritage. As part of that change, the business unveiled a new website that featured RTFKT’s prior work.
Founded as a pioneer at the intersection of digital fashion and collectibles, RTFKT gained early acclaim for creating the world’s first digital sneakers — designs that later materialized into physical products, blending virtual innovation with real-world style.
