Disgruntled NFT Owners File Lawsuit Against Nike

In the beginning, there was RTFKT, and if you took one look at the all-caps name and lack of vowels and thought, “This sounds like an NFT company,” you are absolutely correct. In late 2021, Nike purchased RTFKT with the idea of getting into the then-burgeoning NFT market; the result led to a number of interesting collaborations, including pairs of sneakers that came with the ability to obtain a digital version. It’s kind of like the download codes that come with some LPs, albeit without anything to listen to.

More recently, Nike announced the closure of RTFKT. And as it turns out, that closure has prompted some NFT owners to file a proposed class action lawsuit against the sneaker giant. Writing at Reuters, Jonathan Stempel provided more details about a lawsuit filed in federal court in Brooklyn last week. The plaintiffs cited consumer protection laws in several states in arguing that Nike’s 2024 decision to shutter RTFKT adversely affected their investments.

Reuters cites the plaintiffs in the case describing Nike’s decision to close RTFKT “[caused] the rug to be pulled out from under them.” The plaintiffs are seeking over $5 million in damages.

How likely is it that the lawsuit will succeed? Earlier this year, online betting company DraftKings paid $10 million to settle a lawsuit over its own foray into NFTs. The circumstances there are different from the Nike case; for one thing, it wasn’t prompted by DraftKings ending its NFT program, which did not happen until a year after the lawsuit was filed.

Insider Trading Convictions Have Come to the World of NFTs

The case involves someone using their position at the marketplace OpenSea for illicit gains

As NEXT.io reported about the DraftKings lawsuit, the case involved whether or not NFTs were considered unregistered securities. Reuters’s coverage of the Nike NFT case mentions something similar: the plaintiffs’ argument that they would not have invested in RTFKT NFTs “had they known the tokens were unregistered securities.” It’s a larger question hanging over this lawsuit — and it could have wider implication depending on how this case goes.