Nike is facing a class action lawsuit after shutting down its RTFKT unit.

According to Reuters, the lawsuit was filed in Brooklyn, New York, by a group of NFT buyers. RTFKT sustained financial losses because Nike terminated its operations in December 2024.

After shutting down its RTFKT unit, a group of NFT buyers filed a class action lawsuit against Nike.

According to a report by Reuters, the lawsuit was filed in Brooklyn, New York, by Jagdeep Cheema from Australia, who is being joined by other parties. The lawsuit arises from the closure of RTFKT, a startup focused on metaverse technology and sneakers, which was acquired by the U.S. sportswear giant in December 2021.

Jagdeep Cheema is leading the lawsuit against the U.S. sportswear giant, while his co-applicants are seeking an amount in excess of $5 million in damages, though the exact sum is not specified. The applicants are seeking financial restitution for the losses they incurred.

The lawsuit, which is related to a class action suit, was initiated by The Rosen Law Firm. The firm announced in March 2025 that it had begun investigating on behalf of buyers who have encountered losses. The law firm specializes in investor rights protection in the U.S., and it’s currently preparing a class action lawsuit to recover the lost funds for NFT buyers. The legal fees will be covered by the buyers only if the lawsuit is successful.

According to the statement by The Rosen Law Firm: “The lawsuit, filed in the U.S. District Court for the Eastern District of New York, arises from alleged violations of consumer protection laws in New York and California, Florida, and Oregon.”

Following the closure of RTFKT’s operations in December 2024, the startup sustained financial losses. After shutting down its RTFKT division, which was focused on emerging technology and sneakers, and part of which was acquired by the U.S. sportswear giant in December 2021, Nike sustained financial losses.

Announced last December, RTFKT was showcasing emerging tech to build innovative collectible digital assets. RTFKT offered its customers non-fungible tokens themed around Nike, along with various digital collectible assets. Many people had anticipated that these NFTs would appreciate in market value.

However, things changed rapidly. In December 2024, Nike advised its audience that the RTFKT operations were coming to an end. Once RTFKT ceased operations, the market interest for the NFTs sank immediately.

As RFTKT closed down, the plaintiffs encountered substantial market value drops when their NFTs lost all their worth during one night. All those buyers sustained serious monetary losses from the events.

The purchasers claim that they were given incorrect information by the U.S. sportswear giant about its products. They add that the company sold NFTs to its clients without properly filing for the necessary securities registration.

According to the buyers, they would not have engaged in the NFT purchase had they been aware of the stability risks. They believe that Nike is defrauding its buyers by shutting down the operation unexpectedly to their detriment.

Due to regulatory uncertainties, current U.S. laws fail to clarify the status of NFTs. Regulatory bodies, together with courts, continue to analyze whether NFTs fulfill the requirements for classification as securities under U.S. law.

Amid the ongoing analysis, these legal disputes have multiplied as courts and regulators remain unsure about the legal status of such digital assets. This dispute continues to expand an already increasing number of judicial proceedings involving digital properties.

Meanwhile, the U.S. sportswear giant has yet to publish any official statements about the lawsuit that the plaintiffs have filed against them.

Lawyer Phillip Kim, who is representing the plaintiffs in the case, refused to make any comments related to the case. The court proceedings will determine the future defense strategy of the U.S. sportswear giant.

After shutting down its RTFKT division, which was focused on emerging technology and sneakers, and part of which was acquired by the U.S. sportswear giant in December 2021, the startup sustained financial losses. Announcing the closure of the startup, the U.S. enterprise stated that it planned to keep the innovative principles of RTFKT alive despite its closure.

Moreover, the company statement highlighted that Nike planned to keep the innovative principles of RTFKT alive despite its closure.

As enterprises ignored this information when they felt disregarded by Nike, the U.S. enterprise acknowledged RFTKT as a source of innovation that had stimulated numerous creators along with their projects.

The company applied emerging tech to build collectible digital assets. The startup offered its customers non-fungible tokens themed around the U.S. enterprise, alongside various digital collectible assets. Many people had anticipated that these NFTs would increase in market value.

However, things changed quickly. In December 2024, the U.S. enterprise advised its audience that the startup’s operations were coming to an end. Once RFTKT ceased operations, the market interest for the NFTs plummeted instantly.

As the startup closed down, the plaintiffs encountered substantial market value drops when their NFTs lost all their worth during one night. All those buyers sustained serious monetary losses

News data source: kdj.com

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