Nike is facing a proposed class-action lawsuit from purchasers of Nike-themed non-fungible tokens (NFTs) and other cryptocurrency assets. The plaintiffs, led by Australian resident Jagdeep Cheema, claim they suffered significant losses when Nike abruptly closed its RTFKT unit in December 2024.
The Lawsuit
The lawsuit, filed in Brooklyn, New York federal court, alleges that Nike’s sudden closure caused demand for the NFTs to dry up, resulting in substantial financial losses for the buyers. The plaintiffs argue that they would not have purchased the NFTs at the prices they did, or at all, had they known the tokens were unregistered securities and that Nike would “pull the rug out from under them.”
Background on RTFKT
Nike acquired RTFKT, pronounced “artifact,” in December 2021, citing the fashion brand’s use of “cutting-edge innovation to deliver next-generation collectibles that merge culture and gaming.” On December 2, 2024, Nike announced the wind-down of RTFKT, stating that the innovation it represented would continue through the “countless creators and projects” it inspired.
Legal Context
The legal status of NFTs is currently unsettled, with ongoing litigation over whether they are considered securities under federal law. The lawsuit seeks unspecified damages exceeding $5 million for alleged violations of consumer protection laws in New York, California, Florida, and Oregon.
Reactions
Nike, based in Beaverton, Oregon, did not immediately respond to requests for comment. Phillip Kim, a lawyer for the plaintiffs, declined to comment on the case.
The case is titled Cheema v Nike Inc and is being heard in the U.S. District Court, Eastern District of New York, under case number 25-02305.
