Nike NFT Lawsuit: Did the Company Mislead Buyers With RTFKT Shutdown?

Case Overview: A class action lawsuit accuses Nike of misleading investors who purchased its RTFKT NFTs, alleging the company's subsequent platform shutdown caused significant financial losses after promising digital quests and rewards.

Consumers Affected: Individuals who purchased RTFKT NFTs based on Nike's branding and promotional efforts.

Court: U.S. District Court for the Eastern District of New York

Nike is facing legal scrutiny over its involvement in the digital asset market after a newly filed lawsuit accuses the global apparel brand of causing financial harm to NFT purchasers.

The proposed class complaint centers around RTFKT, Nike’s once-promoted non-fungible token platform, which was quietly shuttered earlier this year.

Plaintiffs allege that investors were drawn into acquiring digital collectibles based on promises tied to Nike's branding, only to have those expectations fall flat following the platform's closure. The suit, filed in a Brooklyn federal court, requests $5 million in damages.

Nike's NFT Venture RTFKT Shuttered, Leaving Investors with Losses

Led by RTFKT token holder Jagdeep Cheema, the proposed class argues that Nike used its name recognition and marketing influence to promote a product that functioned as an unregistered security. By acquiring RTFKT in 2021, Nike stepped into the virtual goods space, creating branded NFT drops like its “CryptoKicks” line.

The plaintiffs allege that these NFTs carried their value from Nike’s image and promotion, not inherent utility, Coin Telegraph reports.

“Because the Nike NFTs derived their value from the success of a given promoter and project—here, Nike and its marketing efforts—investors purchased this digital asset with the hope that its value would increase in the future,” the legal complaint states.

The lawsuit also alleges that Nike failed to register the tokens with the U.S. Securities and Exchange Commission, asserting they met the definition of securities under federal law. This, according to the plaintiffs, places Nike in violation of consumer protection standards and certain state-level trade rules.

Lawsuit Claims Nike Used Brand Power to Improperly Promote NFTs

In January, Nike ended operations at RTFKT and discontinued its previously active digital initiatives. According to the suit, this decision resulted in financial losses for consumers who had invested in tokens with the assumption they could participate in digital quests and rewards.

The class filing describes how token values dropped substantially after the project was shuttered.

Nike’s crypto-themed NFTs debuted in April 2022 at an average trading value of approximately 3.5 Ether, or nearly $8,000 at the time. By April 2025, those tokens were selling for roughly 0.009 Ether—around $16—marking a drastic devaluation.

The complaint says this drop occurred because the product lost its promotional backing and user engagement features, such as quests, that had originally attracted participants.

“Prices plunged and did not recover,” the plaintiffs argue, alleging that platform shutdown removed utility promised at purchase, stripping the NFTs of practical value.

Buyers Allege Promises of Utility and Rewards Went Unfulfilled

Consumers who engaged with the Nike-backed NFTs claim they were not speculating on abstract digital art. Instead, these buyers say they believed they were supporting a functioning product tied to a broader project, with interactive features and potential benefits to token holders.

That trust, the lawsuit claims, was based largely on Nike’s endorsement of RTFKT and ongoing involvement in platform activity, as shown through branded promotions and online participation.

Plaintiffs maintain they were purchasing more than a collectible—they believed it held long-term engagement potential, rewards, and value backed by Nike’s continued presence.

As one section of the filing summarizes, “The value of the NFTs depended on execution of the roadmap and continuation of the project.”

NFT Market Downturn Exacerbates Investor Setbacks

Nike’s legal conflict arrives as interest in NFTs overall has declined. Industry reports show that global NFT sales dropped by 63% year-over-year in the first quarter of 2025, with total volume shrinking from $4.1 billion to $1.5 billion.

Within this environment, the plaintiffs say the cancellation of RTFKT compounded their setbacks by removing perceived functionality that made their purchases worthwhile. While broader market factors contributed to falling prices, the group alleges Nike’s decisions played a direct role in their losses.

Despite an ongoing debate over whether NFTs constitute securities, the plaintiffs argue that their case does not require that question to be answered conclusively. They claim the business practices leading buyers to invest are enough to warrant recovery through consumer protection laws.

In the Nike NFT platform shutdown class action lawsuit, Cheema is asking the court to recognize and certify a class of consumers who purchased RTFKT NFTs based on promotional efforts and Nike branding. If approved, this group may pursue collective compensation for financial losses stemming from project termination.

He is asking for $5 million in damages, legal fees, and additional relief under both federal and state statutes covering unfair business practices. 

Case Details

• Lawsuit: Cheema v. Nike, Inc.
• Court: U.S. District Court for the Eastern District of New York

Plaintiffs' Attorney:

• Laurence M. Rosen, Phillip Kim, and Michael Cohen (The Rosen Law Firm, P.A.)

Did you invest in Nike's RTFKT NFTs? What are your thoughts on the platform's closure? Share your experience below.