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Nike, the athleisure superpower, is facing a $5 million lawsuit after abruptly shutting down its NFT endeavor, RTFKT. Investors claim that the closure caused the market value of Nike’s digital collectibles to plummet, resulting in heavy losses for those who invested.
The lawsuit alleges that Nike omitted to adequately disclose risks related to NFTs, which are coming under greater regulatory scrutiny, including from the SEC. The worth of RTFKT’s NFT collections, worth millions of dollars when it was alive, has plummeted since the shutdown.
RTFKT’s Abrupt Closure Gives Rise to Accusations of ‘Rug Pull.’
A class action lawsuit filed in the Brooklyn federal court alleges that Nike deceived investors after it neglected to provide information about significant risks associated with its non-fungible token (NFT) releases.
The Australian plaintiff, Jagdeep Cheema, and the others assert that Nike’s shutting down of RTFKT in December 2024 was a “rug pull” that left buyers holding “bags” of assets that have diminished in value.
The complaint claims that Nike’s actions are what caused the demand for its NFTs to crash and that buyers would never have made the purchases if they knew about the regulatory risks and potential for project abandonment.
Legal experts say the case highlights a growing regulatory focus on NFTs as potential unregistered securities. As of writing, Beaverton, Oregon-based Nike has not responded publicly to the lawsuit.
Nike Joins NFT Craze
Nike entered the NFT market in late 2021 with the acquisition of RTFKT, a digital fashion brand that merges with blockchain gaming culture. The brand capitalized on Nike’s marketing power, which helped drive a peak of around $168 million in NFT sales.
The NFT space’s run started to wane in 2023 and 2024. On December 2, 2024, Nike said it was winding down all RTFKT ventures, adding that
“The spirit of our gates and platform will live on through community-led initiatives.”
Analysts said big corporate names dabbling in digital assets without strong long-term plans now faced mounting risks of damage to both their reputations and balance sheets.
RTFKT NFT Prices Post-Shutdown
Following the closure announcement, RTFKT-related NFT assets suffered steep declines:
| NFT Collection | December 2024 Price | April 2025 Price | Percentage Drop |
| CloneX | 2.3 ETH (~$4,000) | 0.4 ETH (~$700) | -82.6% |
| MNLTH | 1.1 ETH (~$1,900) | 0.2 ETH (~$350) | -81.8% |
Predictions 20 Short-Term (Q2 2025)
CloneX is anticipating being listed for anywhere between 0.35 and 0.50 ETH.
Note: these target prices are within 0.15–0.25 ETH for MNLTH.
Long-Term Forecast (Q4 2025)
According to OpenSea Floor Tracker, CloneX could potentially bounce to 0.50–0.80 ETH depending on how the market takes this and any future brand announcements.
0.25-0.40 ETH is the possible price range for MNLTH, provided it gets another hype.
The broader NFT market is also facing headwinds, with broader macroeconomic headwinds and regulatory uncertainty dampening investor sentiment.
Claims Focus on Disclosures and Risks Surrounding Regulation
In its complaint, the company claims that Nike did not make the requisite disclosures regarding the legal status of NFTs under U.S. securities law. Plaintiffs contend those tokens were unregistered, which, they say, exposed investors to latent regulatory risks.
The suit, filed under consumer protection laws in New York, California, Florida, and Oregon, seeks more than $5 million in damages. With the changing regulatory environment surrounding digital assets by the US Securities and Exchange Commission (SEC), lawyers are considering this case to be significantly important for companies using blockchain technology.
Blockchain analysts caution that failure to adhere to disclosure requirements could open companies up to heavy sanctions, especially at a time when the SEC is working to include NFTs in the same regulatory purview as stocks and other securities.
What This Means For Corporate NFT Strategies
The case against Nike serves as an important lesson for companies that undertake NFT and blockchain initiatives. Insufficient transparency and abrupt changes in strategy can not only result in financial losses but also deal a heavy blow to consumer confidence and brand image.
“Digital asset ventures face similar levels of compliance and disclosure requirements as traditional financial instruments for companies to become and remain legal when it comes to fundraising in exchange for the sale of an investment contract,”
According to Danielle Peterson, a blockchain legal analyst for CryptoLaw Partners.
With regulatory standards evolving around NFTs, brands entering the space should take a conservative approach and make full disclosures around risks, legality, and project sustainability.
The overall takeaway from Nike’s intertwined storylines with RTFKT is the necessity for well-organized, clear digital asset strategies. And the failure to respond to increased regulatory and investor demands could have severe financial and legal ramifications.
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Frequently Asked Questions
1. Why is Nike being sued for $5 million over RTFKT NFTs?
Nike is being sued again, with investors claiming that RTFKT’s sudden closure led to massive NFT value decreases and that Nike did not disclose key legal and financial risks.
2. What were the risks related to the RTFKT NFTs that Nike purportedly failed to disclose?
Nike never disclosed to buyers that NFTs could be labeled as unregistered securities, investors argue, and it failed to properly disclose risks of a project’s termination.
3. How much of the value lost was due to RTFKT NFTs in the shutdown?
CloneX NFTs plummeted from $4,000 to $700, and MNLTH NFTs nosedived from $1,900 to $350, representing losses of over 80% following the shutdown.
4. What’s next for corporate NFT projects in the wake of this lawsuit?
The complaint serves as a reminder that companies need to be completely open about NFT risks and regulatory problems in order to avoid getting sued and losing consumer confidence for their digital asset projects.
Glossary of Key Terms
1. Non-Fungible Token (NFT)
A type of digital asset that signifies ownership of rare items or content on a blockchain. NFTs are also not interchangeable 1:1 like cryptocurrencies.
2. RTFKT
A digital collectibles and fashion brand purchased by Nike in 2021, which focuses on creating blockchain-based virtual items such as sneakers, avatars, and collectibles.
3. Rug Pull
A situation wherein project developers leave a project suddenly, triggering a collapse of the values of anything related to the project, causing major monetary loss to investors.
4. Class Action Lawsuit
A lawsuit in which one or more members of a large group, or class, of individuals or other entities sues on behalf of the whole group.
5. Blockchain Technology
A digital ledger distributed on multiple computers that securely tracks transactions through the use of cryptography, providing transparency, security, and resistance to unauthorized modifications and tampering.
6. Consumer Protection Laws
Rules intended to protect purchasers from unfair, deceptive, or fraudulent practices in the offers and sales of goods or services are particularly relevant in these new areas, such as NFTs.
7. Unregistered Securities
‘Unregistered securities’ are sold without SEC registration, putting issuers and sellers potentially at risk of regulation; some NFTs may fulfill this criterion depending on the use case.
8. Digital Collectibles
Blockchain items, such as art and avatars or some other form of virtual goods, are bought for their full sale, investment, or utility in a virtual world, unlike other general fungible assets.
