On Friday, Nike was sued by buyers of its RTFKT non-fungible tokens (NFTs) who allege that the company engaged in deceptive marketing and other misconduct. Filed in New York’s Eastern District, the suit seeks “unspecified damages of more than $5 million USD for alleged violations of New York, California, Florida and Oregon consumer protection laws.”
Led by Australian resident Jagdeep Cheema, the suit states that Nike’s quick closure of RTFKT caused the demand for the buyers’ NFTs to decline and “the rug to be pulled out from under them,” per Reuters. The plaintiffs said they would not have purchased the digital assets had they known they were “unregistered securities.”
Nike purchased RTFKT in December 2021, with the plan of investing in the digital sneaker and fashion collectibles site, serving and growing the platform’s community, and extending Nike’s footprint in the space. In December of last year, Nike announced that it was winding down the platform, noting that the company was “recalibrating and reassessing its priorities as it moves into the next chapter of digital innovation.”
Nike has not commented on Friday’s class-action lawsuit, nor has Phillip Kim, the lawyer representing the plaintiffs in the case.
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