• Plaintiffs accuse Nike of selling unregistered securities.
• NFTs linked to RTFKT fell from $8,000 to $16 after closure.
• Lawsuit highlights authorized uncertainty round NFTs as securities.

Nike is dealing with a $5 million class-action lawsuit that claims the corporate misled buyers by selling non-fungible tokens (NFTs) tied to its RTFKT platform earlier than abruptly shutting it down.

Filed in Brooklyn federal courtroom on 25 April, the lawsuit accuses Nike of orchestrating a “rug pull” by closely advertising its sneaker-themed NFTs, encouraging funding, after which closing the platform in January 2025.

The case highlights rising tensions over the classification of NFTs as securities and comes amid a pointy downturn in NFT market worth, with complete gross sales plunging 63% year-on-year within the first quarter.

Nike accused of promoting unregistered NFTs

The category-action group, led by Jagdeep Cheema, alleges that Nike used its model recognition and advertising power to advertise NFTs that functioned as unregistered securities.

Based on the lawsuit, Nike inspired purchases by linking the worth of the NFTs to the corporate’s ongoing promotional efforts, main buyers to anticipate rising asset values tied on to the model’s success.

The grievance argues that buyers suffered “significant damages” after Nike shuttered RTFKT, destroying the tokens’ worth. The swimsuit additionally claims that Nike violated shopper safety and state competitors legal guidelines.

It seeks $5 million in damages, citing breaches associated to advertising unregistered securities and failing to safeguard buyers’ pursuits after shutting down RTFKT.

Notably, the case highlights the authorized uncertainty surrounding NFTs.

Though a United States courtroom has but to definitively rule on whether or not NFTs are securities, OpenSea, a significant NFT market, argued in an April 9 letter to the Securities and Change Fee that NFTs mustn’t fall beneath securities regulation.

Regardless of this broader debate, the plaintiffs contend that the courtroom doesn’t have to settle the securities standing of NFTs to rule on Nike’s alleged wrongdoing.

Nike NFT values crash after RTFKT shutdown

Nike acquired RTFKT Studios, a digital sneaker and collectibles agency, in 2021.

Following the acquisition, Nike launched the “CryptoKick” NFT assortment, which initially traded at a median price of three.5 Ether (round $8,000) when listed on OpenSea on 18 April 2022.

Nonetheless, after Nike shuttered RTFKT in January 2025, the typical price of those NFTs dropped dramatically.

By 21 April, Nike’s CryptoKick tokens have been buying and selling for round 0.009 Ether, or roughly $16.

The lawsuit argues that this collapse in worth instantly harmed buyers who purchased NFTs anticipating future participation in RTFKT’s challenges and quests, a key part marketed as a motive to put money into the tokens.

The plaintiffs declare that the closure eliminated promised utility options that underpinned the NFTs’ worth proposition, leaving buyers with out entry to beforehand promoted alternatives for rewards and engagement.

NFT market gross sales fall 63% in early 2025

The downturn in Nike’s NFT values occurred alongside a broader stoop within the NFT market.

Information exhibits that international NFT gross sales dropped to $1.5 billion from January to March 2025, marking a 63% fall in comparison with $4.1 billion in the identical quarter of 2024.

This contraction displays a rising scepticism amongst buyers concerning the long-term worth of NFTs, notably tasks intently tied to brand-driven hype.

Nike’s scenario provides to a sequence of controversies which might be difficult assumptions concerning the sustainability of digital asset markets.

Whereas debates across the regulatory classification of NFTs proceed, circumstances just like the Nike lawsuit might check new authorized arguments with out ready for formal rulings on securities regulation standing.