Nike is facing a proposed class action lawsuit after the abrupt shutdown of its crypto-focused division, RTFKT, left NFT buyers facing significant financial losses.
The lawsuit, filed on Friday in the U.S. District Court for the Eastern District of New York, is being led by Australian resident Jagdeep Cheema.
It alleges that Nike’s sudden decision to wind down RTFKT in December 2024 triggered a collapse in the value of Nike-themed NFTs and related digital assets, leaving purchasers with investments that plummeted almost overnight.
According to the complaint, claimants argue they would not have purchased the NFTs—at premium prices or at all—had they known the digital tokens could be classified as unregistered securities.
The plaintiffs accuse Nike of effectively “pulling the rug out from under them” by shutting the business down without adequate notice or warning.
Nike, headquartered in Beaverton, Oregon, has yet to respond to media requests for comment regarding the legal action. Phillip Kim, the attorney representing the plaintiffs, also declined to comment.
The claimants are seeking over $5 million in damages, alleging that Nike breached consumer protection laws across several key states, including New York, California, Florida, and Oregon.
This lawsuit further intensifies the broader legal debate over whether non-fungible tokens (NFTs) should be regulated as securities under U.S. law—an issue that remains unsettled as digital asset markets evolve rapidly. Similar legal challenges elsewhere in the country have raised comparable questions around the status of NFTs.
Nike originally acquired RTFKT (pronounced “artifact”) in December 2021, positioning the brand as an innovator at the intersection of culture, gaming, and digital collectibles.
However, on 2 December 2024, Nike announced the closure of RTFKT, stating that while formal operations were ending, the brand’s “legacy would live on” through the creators and projects it had inspired.
The case is titled Cheema v. Nike Inc., filed in the U.S. District Court for the Eastern District of New York under case number 25-02305.
As the Nike NFT lawsuit unfolds, it could set an important precedent for how digital collectibles are treated under American law, with ramifications for the wider crypto and NFT industries.
