Nike was hit with a lawsuit on Friday by buyers of Nike-themed non-fungible tokens (NFTs) and other cryptocurrency assets, claiming significant financial losses after the company abruptly closed the business responsible for creating these assets.
The class-action lawsuit, filed in the U.S. District Court for the Eastern District of New York, alleges that the closure of Nike’s RTFKT unit in December 2024 led to a collapse in the value and demand for the NFTs. The plaintiffs, led by Australian resident Jagdeep Cheema, argue that they would never have purchased the NFTs at their respective prices—or at all—had they known the tokens were unregistered securities. They also contend that Nike’s actions left them with substantial financial losses when the business was shut down unexpectedly.
Nike, headquartered in Beaverton, Oregon, has not responded to requests for comment. Phillip Kim, the attorney representing the plaintiffs, also declined to offer any remarks.
The legal status of NFTs remains ambiguous, with ongoing debates and legal battles over whether they qualify as securities under federal law.
The lawsuit seeks unspecified damages exceeding $5 million, citing alleged violations of consumer protection laws in New York, California, Florida, and Oregon.
Nike had acquired RTFKT, a digital fashion brand, in December 2021, describing the acquisition as a step toward advancing “cutting edge innovation” to offer “next-generation collectibles” that blend culture and gaming. However, Nike officially announced the winddown of RTFKT’s operations on December 2, 2024, while emphasizing that the innovation RTFKT embodied would continue to inspire future projects and creators.
The case is listed as Cheema v. Nike Inc., U.S. District Court, Eastern District of New York, Case No. 25-02305.
Related topics:
Bessent Criticizes IMF and World Bank, Pushes for US Leadership
Cantor, Tether, SoftBank Plan $3B Crypto Fund
Crypto Firms Pursue Bank Charters as Stablecoin Regulations Intensify
