- Investors claim Nike’s shutdown of RTFKT was a $5M “rug pull.”
- Plaintiffs argue Nike NFTs qualify as unregistered securities.
- NFT values crashed after promised features were scrapped.
A group of NFT holders has filed a class-action lawsuit against Nike, accusing the company of conducting a “rug pull” with its RTFKT. The lawsuit, filed in the U.S. District Court for the Eastern District of New York, seeks $5 million in damages.
Led by RTFKT holder Jagdeep Cheema, the plaintiffs allege Nike promoted sneaker-themed NFTs, profited from sales, and then abruptly shut down the platform in January 2025. They claim this left investors with worthless digital assets and massive losses.
Plaintiffs Claim Nike NFTs Are Securities
The lawsuit argues that Nike NFTs qualify as securities under the Howey Test. According to the plaintiffs, investors placed money into a common venture expecting profits based on Nike’s efforts. Since Nike never registered the NFTs as securities, they are accused of violating U.S. securities laws.
Nike acquired RTFKT in December 2021 during the NFT boom. RTFKT established as a top player with projects such as CloneX and Cryptokicks, which combined gaming, fashion, and blockchain technology. Purchasers were being promised experiences such as forging events, quests, and special sneaker drops associated with the NFTs.
But as the NFT marketplace cooled in 2023 and 2024, RTFKT’s popularity fell. In December 2024, Nike announced the winding down of RTFKT after the final “Blade Drop.” Plaintiffs argue that this decision caused NFT values to collapse almost overnight.
The lawsuit claims that promised features such as forging, peer-to-peer trading, and community challenges disappeared after the shutdown. The secondary market dried up, and prices plunged, causing major losses for NFT holders.
The complaint describes Nike’s actions as a “brazen rug pull,” accusing the company of abandoning its investors and the RTFKT community. Nike has not yet publicly responded to the lawsuit.
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