Nike Sued Over Abrupt Closure of Crypto Business, Leaving Investors in the Lurch
Brooklyn, New York – April 27, 2025
Nike Inc., the global athletic wear giant headquartered in Beaverton, Oregon, is facing a proposed class action lawsuit following the abrupt closure of its RTFKT unit, which was focused on creating Nike-themed cryptocurrency assets. The lawsuit was filed in a federal court in Brooklyn and centers on claims made by investors who allege they suffered significant financial losses due to the unexpected termination of the crypto business.
The plaintiffs, led by Australian resident Jagdeep Cheema, argue that the sudden closure in December 2024 led to a significant drop in the demand for the non-fungible tokens (NFTs) they had purchased. In their filing, the investors contend that they would not have made these purchases, or would have paid less, if they had known that the NFTs were unregistered securities and that Nike would be pulling the plug on the operations. They accuse the company of having misled them, effectively “pulling the rug out from under them” at a time when interest in NFTs and crypto assets was evolving.
As a result of the closure, the investors are seeking more than $5 million in unspecified damages, citing violations of consumer protection laws across New York, California, Florida, and Oregon. The legal landscape surrounding NFTs is still murky, with ongoing debates about whether such digital assets qualify as securities under federal law, a situation that adds complexity to the lawsuit.
Nike had acquired RTFKT, a virtual sneaker and fashion brand, in December 2021, touting the venture as an initiative leveraging “cutting edge innovation to deliver next generation collectibles that merge culture and gaming.” However, the athletic apparel leader announced the winding down of RTFKT on December 2, 2024, stating that while the unit would cease operations, the innovative spirit it represented would persist in the works of other creators and projects inspired by the brand.
As the lawsuit unfolds, questions loom about the future of digital assets linked to prominent brands and the legal protections available to investors in such volatile markets. Nike has not yet publicly addressed the lawsuit or its implications, and attorneys representing the plaintiffs have chosen not to comment further at this stage.
This lawsuit comes at a pivotal moment for Nike as it reassesses its strategic priorities under new leadership, particularly with the appointment of Elliott Hill as CEO.
Legal Reference: Cheema v. Nike Inc, US District Court, Eastern District of New York, No. 25-02305
This case highlights the growing intersection of technology and consumer rights within the fashion industry, emphasizing a critical moment for both established brands and digital asset investors. As the landscape continues to evolve, it remains to be seen how legal precedents will shape the future of NFTs and their status in the marketplace.
Share this article:
