Nike Faces Lawsuit After Abruptly Axing RTFKT NFT Division

Sportswear giant Nike gets slapped with legal action following its sudden shutdown of RTFKT—its once-hyped NFT arm. Investors and collectors left holding the bag.

Web3 meets wrongful termination? Plaintiffs allege Nike pulled the plug without warning, vaporizing millions in digital asset value. The Swoosh’s metaverse ambitions now look as deflated as a dead NFT project.

Bonus jab: Another case of corporate America treating crypto like a disposable marketing budget—until the lawsuits start rolling in.

Lawsuit wants courts to define NFTs as securities

An even more fundamental legal inquiry for those in litigation is: Are NFTs securities? It’s a problem that United States regulators and courts are still wrestling with. It’s something that many investors are concerned about: what rights and protections are in place when they buy this asset.

The group claims in the suit that Nike sold the NFTs without registering them with financial agencies. That, they say, flies in the face of laws to protect investors.

The case is part of a rising wave of litigation involving NFTs and crypto assets. As digital collectibles caught on, firms rushing to cash in sometimes operate without clearly established rules or accountability. This case could set a precedent for addressing losses tied to NFTs.

Phillip Kim, the lawyer representing the plaintiffs, did not immediately return a request for additional comment about the case.

Users report glitches in RTFKT NFTs after shutdown

RTFKT, pronounced “artifact,” was once hailed as Nike’s big play in the future of fashion and gaming. The athletic giant bought the startup in December 2021, describing it as a bold move into the next generation of collectibles.

However, after the service shut down in December 2024, numerous users said they had experienced technical issues with their NFTs. For instance, the photos of the popular items in the clone nodes of the Clone X series were not shown. Instead, prospective purchasers received a “holding page” from Cloudflare — a provider of web services — indicating that the content had been removed.

This led to speculation that Nike had stopped paying for the servers or server platforms that hosted the NFT visuals. Some digital art has resurfaced online since then, but the episode prompted serious questions about a piece of digital art tied to a centralized service and its long-term value.

In December, Nike said the innovation that RTFKT brought will live on through the many creators and projects it inspired. But that promise rings hollow for many purchasers.

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