Nike is facing its own lawsuit at the moment. Plaintiffs are proposing more than $5 million in damages, alleging that the company broke consumer protection laws in multiple states. The court case plays out across four states — New York, Oregon, Florida and California. We wish the plaintiffs the best as they push for a jury trial to resolve their claims.
The lawsuit is most notable for its focus on Nike’s RTFKT NFT project. In September, the company announced plans to wind it down by December 2024. The plaintiffs argue that Nike's promotion and subsequent winding down of RTFKT's operations resulted in significant financial damages for investors.
As a result of Nike’s promotion of the unregistered securities and also its rug pull, Plaintiff and the Class – many of whom are retail investors who lack the technical and financial sophistication necessary to have evaluated the risks associated with their investment in The Nike NFTs and were denied the information that would have been contained in the materials required for the registration of The Nike NFTs – have suffered significant damages in an amount to be proven at trial. - [court documents]
The lawsuit further asserts that the value of the Nike NFTs was intrinsically linked to the company's marketing efforts and brand reputation.
Because The Nike NFTs derived their value from the success of a given promoter and project – here, Nike and its marketing efforts – investors purchased this digital asset with the hope that its value would increase in the future as the project grows in popularity based on the Nike brand. - [court documents]
Nike has promised to continue honouring RTFKT’s legacy even as it phases out its operations. The company has not responded to T4America’s inquiry for an official comment on the lawsuit.
With any luck, this case will have the opportunity to attract national attention. It underscores the legal and financial risks associated with investing in digital assets and NFTs, particularly those associated with recognizable brands. Depending on how the trial goes, there are important precedents that can be set for future cases. This is particularly important in the rapidly evolving realm of digital collectibles and blockchain technology.
