Buyers of digital assets and non-fungible tokens (NFTs) with Nike themes sued Nike on Friday, claiming they lost a lot of money when the sportswear corporation shut down the company that produced the assets.
In a proposed class action lawsuit filed in federal court in Brooklyn, New York, buyers lead by Australian citizen Jagdeep Cheema claimed that the abrupt closure of Nike’s RTFKT subsidiary in December reduced demand for their NFTs.
They said Nike would “cause the rug to be pulled out from under them” and that if they had known the tokens were unregistered securities, they would never have purchased the NFTs at the rates they did or at all.
Requests for comment were not immediately answered by Beaverton, Oregon-based Nike. Phillip Kim, one of the plaintiffs’ attorneys, remained silent.
Whether NFTs are securities under federal law has been the subject of much litigation, and their legal status is still up for debate.
For claimed violations of consumer protection laws in New York, California, Florida, and Oregon, the complaint filed Friday demanded more than $5 million in unspecified damages.
RTFKT, which translates as “artifact,” was acquired by Nike in December 2021, claiming that the fashion label was using “cutting edge innovation to deliver next generation collectibles that merge culture and gaming.”
On December 2, 2024, it said that RTFKT had ended its operations, but it also predicted that the “countless creators and projects” it inspired would continue to carry on the creativity RTFKT stood for.
