Nike Hit With $5 Million Lawsuit Over Alleged NFT Securities Violations

The world’s largest sportswear brand, Nike, was sued on Friday with a $5 million proposed class action, accusing the company of abandoning NFT investors by abruptly shutting down its RTFKT subsidiary and abandoning its sneaker-themed digital assets.In a lawsuit The complaint also accuses Nike of promoting unregistered securities in violation of U.S. law, enticing buyers with “marketing prowess” to “hype, promote, and prop up” sneaker-themed The lawsuit comes as regulators In any case, plaintiffs, led by Jagdeep Cheema, claim they “would never have purchased the Nike NFTs at the prices they did, or at all,” had they known the tokens were unregistered securities or that Nike would abandon the project. “The Nike NFTs were never registered as such,” the complaint said, alleging Nike deprived investors of material disclosures that registration would have required.”One does not expect it from Nike,” the complaint reads, “the international sports juggernaut with yearly revenue of around $50 billion. But that is what Nike did.”Nike has not immediately responded to In December 2024, RTFKT abruptly announced via social media that it was “Even if the NFTs are not considered securities, the lawsuit alleges, Nike’s “deceptive acts”-building an ecosystem of rewards to boost NFT demand and then pulling support – violated consumer protection laws in New York, California, Florida, and Oregon.They also claim “unjust enrichment,” noting how Nike profited from primary and secondary NFT sales while leaving retail investors to bear the losses.Meanwhile, last week, RTFKT’s NFTs, including its flagship Clone X collection co-created with artist Takashi Murakami, Images stored off-chain were replaced by a black screen displaying “This content has been restricted” after Cloudflare prematurely downgraded RTFKT’s account to a free tier, according to RTFKT’s head of technology, Samuel Cardillo.Edited by