Nike Faces $5M Lawsuit Over Alleged “Rug Pull” of RTFKT NFTs
A group of investors has filed a class-action lawsuit against Nike, accusing the brand of orchestrating a $5 million “rug pull” by shutting down its RTFKT NFT project. The lawsuit, submitted to the U.S. District Court for the Eastern District of New York, claims Nike marketed and profited from sneaker-themed NFTs before abruptly ending the project in January 2025, leaving holders with devalued assets.
Nike NFTs Alleged to Be Unregistered Securities
Lead plaintiff Jagdeep Cheema and others argue that Nike’s NFTs meet the criteria for securities under the Howey Test. They contend that buyers invested expecting returns based on Nike’s efforts, and by failing to register the NFTs as securities, Nike violated U.S. securities regulations.
Nike had acquired RTFKT in December 2021 during the peak of the NFT craze. RTFKT gained fame for projects like CloneX and Cryptokicks, blending fashion, gaming, and blockchain elements. Investors were lured by promises of exclusive experiences, including forging events, quests, and limited sneaker drops tied to the NFTs.
However, as the NFT market slumped throughout 2023 and 2024, RTFKT’s momentum faded. Following a final event called the “Blade Drop,” Nike announced RTFKT’s closure in December 2024. Investors claim this move triggered an immediate crash in NFT values.
The lawsuit alleges that key promised features such as forging capabilities, peer-to-peer trading, and community events were scrapped after the shutdown. The collapse of the secondary market reportedly left NFT holders facing steep losses.
The plaintiffs characterize Nike’s actions as a “blatant rug pull,” accusing the company of abandoning both investors and the broader RTFKT community. Nike has yet to issue a public statement regarding the lawsuit.
