Nike Faces Lawsuit Over Closure of Cryptographic Business
New York, April 25, 2025 — Nike Inc. is facing a proposed class action lawsuit filed by investors who purchased Nike-themed non-fungible tokens (NFTs) and other cryptocurrency assets. The suit comes in response to the company’s abrupt decision to shut down its RTFKT division, which was integral to the creation and sales of these digital assets.
Allegations from NFT Purchasers
The lawsuit, initiated by Australian resident Jagdeep Cheema and filed in the U.S. District Court for the Eastern District of New York, claims that buyers of these NFTs experienced significant financial losses following the closure of RTFKT in December 2024. The plaintiffs argue that demand for their NFTs has diminished drastically since the unit’s shutdown. They contend that they would have refrained from purchasing the NFTs at their respective prices had they been aware that these tokens were unregistered securities and that Nike would effectively "pull the rug out from under them."
Background of RTFKT Acquisition
Nike acquired RTFKT, a digital fashion brand praised for blending culture and gaming through innovative collectible creations, in December 2021. The company heralded this acquisition as a strategic move to lead in the digital collectibles sector. However, the RTFKT division’s winddown, announced on December 2, 2024, was positioned by Nike as a means to allow the innovation it represented to persist through other creators and projects.
Legal Context and Damages Sought
The legal landscape regarding NFTs remains uncertain, particularly concerning whether they should be classified as securities under federal law. The plaintiffs are seeking unspecified damages exceeding $5 million, claiming violations of consumer protection laws across several states, including New York, California, Florida, and Oregon.
Despite the serious allegations, Nike, which is headquartered in Beaverton, Oregon, has not yet issued a public comment regarding the lawsuit. Phillip Kim, the attorney representing the plaintiffs, also refrained from commenting on the ongoing legal proceedings.
Implications and Conclusion
This lawsuit underscores the challenges faced by companies venturing into the rapidly evolving cryptocurrency and digital asset markets. As the case unfolds, it is likely to be closely watched not only by other businesses within the industry but also by regulatory bodies as they evaluate the legal standing of NFTs and digital assets at large. The case is formally listed as Cheema v. Nike Inc., U.S. District Court, Eastern District of New York, No. 25-02305.
As developments occur, more information will be tracked regarding the implications of this lawsuit on both Nike and the broader cryptocurrency marketplace.