RTFKT NFT Investors Hit Nike with $5M Class Action

Nike, a popular American sportswear giant, is facing a lawsuit of $5 million following the sudden shutdown of its RTFKT NFT platform. 

A group of RTFKT NFT purchasers recently filed a class action against Nike in Brooklyn, New York. The plaintiff, led by an Australian, Jagdeep Cheema, made two allegations against Nike following the closure of its RTFKT platform in December 2024. 

Nike Faces $5M Lawsuit Over RTFKT Shutdown as NFT Buyers Claim Major Losses. pic.twitter.com/tLLuDvc7zE

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Accusations Against Nike 

The investors accused Nike of misleading them about the long-term stability and value of the RTFKT non-fungible tokens. It bears mentioning that Nike acquired RTFKT Studios in December 2021. The platform was used to create virtual sneakers in the form of NFTs. 

Given Nike’s involvement in the initiative, many expected the NFT’s value to skyrocket tremendously. However, they were stunned last year after Nike shut down the NFT unit in December 2024. 

This led to a massive drop in investors’ interest in and value of the NFTs, causing early investors huge losses. 

Also, the plaintiff alleged that Nike failed to register RTFKT NFTs under federal securities law. The complaint noted that Nike’s failure to register the NFTs as securities clearly skipped the legal process required to protect investors. 

This class action underscores the regulatory uncertainty surrounding digital collectibles like NFTs. At the moment, the U.S. law does not explicitly state whether NFTs qualify as securities or commodities.

In the U.S., an asset is given the securities tag when it fulfills the conditions of the Howey Test. The plaintiffs argued that the RTFKT NFTs functioned like securities, as buyers expected Nike’s success to drive their values. 

Further, they accused Nike of using its marketing prowess to promote the RTFKT NFTs. The development came a few weeks after the leading NFT marketplace, OpenSea, urged the SEC to clarify that NFTs are not securities. 

Notably, the class action seeks $5 million in damages from Nike to cover investors’ losses. It also accused Nike of violating consumer protection and state unfair trade and competition laws. 

Nike NFTs Value Plunge 

It bears mentioning that the value of Nike NFTs has plummeted heavily from their initial listing price. When the NFTs were first listed on OpenSea in April 2022, they traded at an average price of 3.59 ETH ($6,483). The value has plunged to an average price of 0.0099 ETH ($17.87), representing a decline of 99.72% from the initial listing price. 

Additionally, the number of RTFKT NFT sales also dropped from 835–recorded on its debut date–to 13 in the hours leading up to press time. This drop coincides with the collapse observed in the broader NFT market in Q1 2025. 

Notably, the broader NFT market sales plunged to $1.5 billion in the first three months of the year, marking a 63.41% drop from the $4.1 billion sales recorded in the previous year.