Nike Hit With $5 Million Lawsuit Over Alleged NFT Securities Violations

The largest brand of sportswear in the world, Nike, was charged on Friday with a proposed class Action of $ 5 million, and accused the company of leaving NFT investors by abruptly closing his RTFKT subsidiary and leaving his digital assets with sneaker theme.

In a lawsuit submitted On Friday in the eastern district of New York, claimants claim that Nike used his iconic brand to hype digital collective objects that were connected to its digital fashion and technology company RTFKT, and then performed a “soft carpet draw”, leaving investors with devalued and illiquid NFT’s lagging behind.

The complaint also accuses Nike of promoting unregistered effects in violation of American legislation, seducing buyers with “marketing capitals” to promote and support sneaker theme ” NFTsOnly to withdraw support once the profit was made.

The lawsuit comes as supervisors reconsider How NFTs should be treated under American securities laws. Last month SEC Crypto Task Force Hester Peirce suggested that certain NFT projects can soon be formally exempt from securities classification.

In any case, claimants, led by Jagdeep Cheema, claim that they would never have bought the Nike NFTs at the prices they did, or not at all ‘, if they knew that the tokens were not registered effects or that Nike would leave the project.

“The Nike NFTs are never registered as such,” said the complaint, claiming that Nike investors robbed of material disclosures that registration would have required.

“People don’t expect it from Nike,” is the complaint, “the international sports juggernaut with an annual turnover of around $ 50 billion. But that’s what Nike did.”

Nike did not respond immediately Decrypts Request for comments.

In December 2024, RTFKT abruptly announced that it was “windy“Operations, which send secondary market prices for Nike NFTs that fall, prices that still have to recover.

Even if the NFTs are not regarded as effects, the court case, the “misleading actions” of Nike – claims to build an ecosystem of rewards to stimulate the demand for NFT and then get support – the laws for consumer protection in New York, California, Florida and Oregon.

They also claim ‘unjustified enrichment’, and notice how Nike benefited from the primary and secondary NFT sales, while retail investors have the losses bear.

Meanwhile, last week, RTFKT’s NFTS, including the flagship Clone X collection co-created with artist Takashi Murakami, briefly From display because of a problem with the Cloudflare hosting.

Images that were stored off-chain were replaced by a black screen with “this content is limited” after Cloudflare had lowered the RTFKT account to a free low, according to RTFKT’s head of technology, Samuel Cardillo.

Edited by Sebastian Sinclair