• Plaintiffs accused Nike of selling unregistered securities.
• The RTFKT-linked NFTS fell from $8,000 to $16 after closure.
• The lawsuit highlights authorized uncertainty concerning NFTs as securities.

Nike is dealing with a $5 million class motion lawsuit claiming it misunderstood traders by out of the blue shutting down an inconceivable token (NFT) tied to the RTFKT platform.

The lawsuit, filed in Brooklyn Federal Courtroom on April 25, accusing Nike of orchestrating “Ragpur” by emphasizing sneaker-themed NFTs, encouraging investments and shutting the platform in January 2025.

The case highlights the rising rigidity over the classification of NFTs as securities, with gross sales surged within the first quarter of 63% year-on-year within the first quarter amid a pointy decline in NFT market values.

Nike has been accused of promoting unregistered NFTs

The category motion group led by Jagdeep Cheema claims that Nike used its model consciousness and advertising energy to advertise NFTs that act as unregistered securities.

In response to the lawsuit, Nike inspired purchases by linking the worth of the NFT to the corporate’s ongoing promotional actions, main traders to count on a rise in asset worth that’s immediately linked to the model’s success.

The grievance alleges that traders suffered “critical damages” after Nike shut down RTFKT and destroyed the worth of the token. The lawsuit additionally alleges that Nike violated client safety and state competitors legal guidelines.

It cites violations associated to advertising unregistered securities and seeks $5 million in damages for failing to guard traders’ pursuits after closure of RTFKT.

Specifically, this case highlights the authorized uncertainty surrounding NFTs.

Whereas US courts nonetheless don’t have any decisive management over whether or not NFTs are securities, Opensea, the main NFT market, argued in an April 9 letter to the Securities and Change Fee that NFTs mustn’t fall underneath securities rules.

Regardless of this broader argument, the plaintiffs argue that the court docket doesn’t have to resolve the securities standing of the NFTS in an effort to management NIKE’s misconduct.

Nike NFT worth crashes after rtfkt shutdown

Nike acquired RTFKT Studios, a digital sneaker and collectibles firm in 2021.

After the acquisition, Nike launched the “Cryptokick” NFT assortment. This was initially traded at a value of three.5 ether (roughly $8,000) when listed in Opensea on April 18, 2022.

Nonetheless, the typical value for these NFTs fell dramatically after Nike closed RTFKT in January 2025.

By April twenty first, Nike’s Cryptokick Tokens had been buying and selling for round 0.009 ether, or round $16.

The lawsuit alleges that this worth collapse immediately harmed traders who bought NFTS in hopes of future participation within the challenges and quests of RTFKT, the principle element bought as a motive to put money into tokens.

The plaintiffs alleged that the closure eliminated the promised utility options that underpinned the NFTS worth proposition, and claimed that traders had been unable to advertise reward and engagement alternatives beforehand.

NFT market gross sales fell 63% in early 2025

The stoop in NIKE’s NFT values ​​occurred together with a wider stoop within the NFT market.

Information exhibits world NFT gross sales fell to $1.5 billion from January to March 2025, exhibiting a 63% decline in comparison with $4.1 billion within the 2024 quarter.

This contraction displays rising skepticism amongst traders about NFTs’ long-term worth, notably tasks which can be intently tied to brand-driven hype.

The Nike state of affairs has augmented a sequence of controversies, a difficult assumption concerning the sustainability of the digital asset market.

Whereas debate over NFTS regulatory classification continues, instances just like the Nike case might take a look at new authorized arguments with out ready for a proper ruling concerning the standing of securities legislation.