Nike RTFKT NFT Lawsuit: $5M Class Action Hits Sportswear Giant

The Nike RTFKT NFT lawsuit is making waves across both the crypto and corporate worlds. Filed in April 2025, this $5 million class-action suit accuses Nike of pulling a “rug pull” on investors by shutting down its NFT platform, RTFKT Studios. As the NFT market faces sharp declines, the outcome of this lawsuit could reshape how major brands approach Web3 projects moving forward. Here’s everything you need to know about this high-profile legal battle.

What is the Nike RTFKT NFT Lawsuit?

In January 2025, Nike abruptly shut down RTFKT, its NFT-focused division that created digital sneakers and collectibles. This sparked outrage among RTFKT token holders, leading a group — led by Jagdeep Cheema — to file a Nike class action lawsuit in Brooklyn federal court.

Source: https://storage.courtlistener.com/recap/gov.uscourts.nyed.530559/gov.uscourts.nyed.530559.1.0.pdf

The lawsuit alleges:

• Nike hyped sneaker-themed NFTs to investors using its powerful brand.

• The NFTs sold were actually unregistered securities, violating U.S. law.

• After Nike closed RTFKT, NFT values crashed, and investors were left stranded without promised utilities like challenges and rewards.

At the heart of the Nike NFT rug pull accusation is the idea that Nike profited while investors took the hit when prices plunged. Nike’s “CryptoKicks” NFTs, once valued at around 3.5 ETH ($8,000), have dropped to just 0.009 ETH ($16) on OpenSea.

Read more: Crypto Titans Collide | Bitcoin Price Analysis | KiloEX DEX Hacked

Why the Nike RTFKT NFT Lawsuit Matters in 2025

This lawsuit comes at a time when the entire NFT sector is facing serious headwinds.

• NFT Market Crash 2025: Overall NFT sales dropped by 63% year-over-year in Q1 2025.

• Investor Trust Issues: The closure eroded trust between major brands and NFT investors.

• Regulatory Uncertainty: Courts haven’t yet decided if NFTs are officially “securities.” If they are, major companies could face huge liabilities.

Moreover, OpenSea recently urged the SEC not to classify NFTs as securities, emphasizing the urgency and relevance of this issue today.

Source: OpenSea

If Nike loses this case, it could set a powerful precedent for how NFTs are regulated and how companies must treat digital asset investors moving forward.

Key Insights From the Nike RTFKT NFT Shutdown

1. Brand Power Alone Isn’t Enough

Even trusted giants like Nike can face backlash if expectations aren’t met.

2. Legal Gray Areas Can Be Dangerous

Selling NFTs without clear regulatory guidance risks massive lawsuits.

3. NFT Utility Must Deliver

Investors bought RTFKT NFTs expecting utility like challenges, quests, and rewards — not just ownership of a digital file.

4. Secondary Market Liquidity Matters

After RTFKT’s shutdown, NFT prices crashed because liquidity and trading opportunities dried up.

What to Watch Next

If you’re involved in NFTs or planning to invest, here are a few things to keep an eye on:

• Court rulings on NFT securities: How judges handle the Nike case could shape the future of the NFT market.

• Other brand NFT projects: Brands like Adidas and Puma also have NFT projects. Will they follow Nike’s path or step up their commitment?

• New SEC regulations: Future crypto and NFT laws could significantly impact how platforms are allowed to operate.

Pro Tip: Always check if an NFT project offers true ownership, clear utilities, and transparent exit strategies before investing.

Conclusion

The Nike RTFKT NFT lawsuit could become a defining moment for the Web3 industry. Whether Nike wins or loses, it highlights one big lesson: Investors need more protection, and brands need more accountability when stepping into the NFT space.

As NFTs continue to evolve, staying informed about legal battles like this one can help you make smarter, safer decisions in the crypto world.

If you want to stay ahead in crypto legal news, check out our guide to how NFTs could be regulated in 2025.

Frequently Asked Questions (FAQs)

1. What is the Nike RTFKT NFT lawsuit about?
The Nike RTFKT NFT lawsuit is a $5 million class-action case accusing Nike of misleading investors by promoting unregistered NFT securities and abruptly shutting down its RTFKT platform, causing massive financial losses.

2. Why are RTFKT NFT holders suing Nike?
RTFKT NFT holders claim Nike used its brand power to hype the NFTs without properly registering them as securities. After Nike shut down RTFKT, the value of their NFTs collapsed, leading to significant investor losses.

3. Are NFTs considered securities in the United States?
Currently, U.S. courts have not officially ruled that NFTs are securities. However, ongoing lawsuits like the Nike RTFKT NFT lawsuit could help shape future legal definitions and regulatory guidelines.

4. How much have RTFKT NFTs dropped in value?
Nike’s RTFKT NFTs were initially trading for around 3.5 ETH ($8,000) in 2022. As of April 2025, they have dropped to approximately 0.009 ETH ($16), according to OpenSea.

5. How could the Nike RTFKT NFT lawsuit impact the NFT market?
If the lawsuit succeeds, it could force brands to be more cautious when launching NFT projects, encourage stricter regulations for digital assets, and reshape the future of NFT investments.