Nike’s NFT empire crumbles and buyers are suing
Nike is facing a proposed class-action lawsuit from buyers of its non-fungible tokens (NFTs) who claim the company misled them about the digital assets, according to Reuters. The lawsuit, filed in New York’s Eastern District, accuses Nike of causing “the rug to be pulled out from under them” by winding down its virtual shoe project, RTFKT, last year.
The plaintiffs argue they wouldn’t have purchased Nike’s NFTs if they had known they were “unregistered securities.” The lawsuit seeks unspecified damages of more than $5 million for alleged violations of consumer protection laws in New York, California, Florida, and Oregon.
Nike acquired RTFKT in 2021 in an attempt to capitalize on the NFT market, but ultimately abandoned the project. In December, the company announced it would “wind down RTFKT operations” by the end of January this year through the RTFKT X account. Since then, the project’s maintenance appears to have been taken over by Samuel Cardillo, who has been managing the CloneX NFTs project.
The lawsuit highlights the risks and uncertainties associated with investing in NFTs, particularly those tied to specific brands or projects that may be discontinued. The case may set a precedent for similar lawsuits involving NFTs and consumer protection laws.