What to know

  • Nike is facing a $5 million lawsuit from investors who bought its NFTs.
  • The lawsuit claims Nike executed a 'rug pull' by promoting NFTs and then shutting down the RTFKT platform.
  • Nike's Cryptokicks NFTs saw their value drop from around $8,000 to $16.
  • The lawsuit alleges that Nike sold unregistered securities.

Nike, the well-known sportswear brand, is dealing with a significant legal challenge, reports Reuters. A group of investors has filed a $5 million lawsuit against the company. The lawsuit centers around Nike's decision to shut down its RTFKT NFT platform, which it acquired in 2021.

The investors claim that Nike used its brand power to promote NFTs, leading them to believe these digital assets would increase in value. However, once Nike announced it was winding down RTFKT operations, the value of these NFTs plummeted.

One of the key NFT collections, Cryptokicks, saw its value drop dramatically from around $8,000 in April 2022 to just $16 by April 2025. This sharp decline has left many investors with significant financial losses.

The lawsuit also alleges that Nike sold these NFTs as unregistered securities, which is a violation of securities laws. The plaintiffs argue that Nike's actions were deceptive, using the term 'rug pull' to describe how the company allegedly misled investors by promoting the NFTs and then abandoning the project.

The overall NFT market has been experiencing a downturn, with sales in the first quarter of 2025 dropping by 63% compared to the same period in 2024. This decline adds to the challenges faced by investors in the Nike NFT case.

Via: TheVerge