Nike is facing a lawsuit from NFT (non-fungible tokens) buyers who claim the company left them with worthless digital assets after suddenly shutting down its RTFKT NFT division, the unit that made Nike-themed NFTs, last December.  

The class-action lawsuit, filed in New York federal court, accuses Nike of selling unregistered securities through its RTFKT brand and then abandoning the project, which caused the NFT values to crash, states a recent report by Reuters. Lead plaintiff Jagdeep Cheema from Australia said buyers would never have purchased these NFTs if they knew Nike would "pull the rug out from under them". 

According to Reuters, Nike bought RTFKT (pronounced 'artifact') in 2021 as part of its push into digital fashion and gaming collectables. But on December 2, 2024, the company quietly announced it was winding down the NFT business, saying its "innovation" would live on through other projects.  

The lawsuit argues Nike violated consumer protection laws in multiple states and seeks over $5 million in damages, states the report. The case highlights ongoing legal uncertainty about whether NFTs should be regulated like stocks and bonds.  

Nike has not yet commented on the lawsuit. As per Reuters, legal experts say this case could test whether companies can be held responsible when NFT projects fail.

The lawsuit comes as the NFT market continues struggling after its 2021-2022 boom, with many once-valuable collections now worth pennies.