This week, Nike was hit with a $5 million class action lawsuit after abruptly shutting down its RTFKT NFT platform. According to the lawsuit, Nike’s conduct led to millions of dollars in losses for investors in some NFTs. Jagdeep Cheema, the Australian plaintiff, claims that the platform’s shutdown led to a sudden drop in the value of NFTs. He is convinced this crisis has profoundly hampered his investments.
The RTFKT platform was effectively shut down just one year later in December 2024. This sudden turn of events quickly erased all investor interest and effectively rendered the related NFTs worthless. The NFTs originally sold on OpenSea in April of 2022. Since then, they have experienced a remarkable price decrease to an average of only 0.0099 ETH, roughly $17.87. That’s a 99.72% drop from its original listing price of 3.59 ETH ($6483).
Legal and Market Context
Even NFT giants like OpenSea have stepped up, calling on the SEC to provide some much needed guidance. They were particularly interested in whether NFTs are securities. So far, the SEC has clearly avoided answering whether NFTs fit the definition of securities or commodities. In the United States, an asset is typically considered a security if it meets the criteria outlined in the Howey Test.
At the same time, the broader NFT market has taken a hit. Sales dropped to a shocking $1.5 billion in Q1 2025. This is a shocking 63.41% decrease from the $4.1 billion in Q3 of last year. This downward trajectory is just a part of a larger trend of waning enthusiasm (and dollars) that has roiled the broader NFT market.
Allegations and Demands
To date, one class action lawsuit has been filed against Nike’s practices. It argues that the closure of the RTFKT platform has inflicted substantial monetary damages on NFT holders. Specifically, the deserving plaintiff alleges that Nike acted against the interests of its investors and thus should pay for the resulting losses.
The class action is asking for $5 million in damages from Nike to reimburse investors for their losses incurred due to the alleged misstatements. This sum is supposed to compensate for the drastic decrease in the NFTs’ value after the marketplace’s shut down. This legal action further illustrates the increased scrutiny and liabilities that may develop from the standards of care surrounding the management and operation of NFT platforms.
Future Implications
This case has the potential to be hugely damaging to the NFT market. It would further reshape what is expected of companies doing business in this arena. If the ruling ultimately favors the plaintiffs, it would set a damaging precedent. This would again open up future lawsuits against corporations that fail to sufficiently manage or stand behind their NFT platforms. This would likely trigger more regulatory scrutiny of the NFT marketplace as a whole. In turn, we can expect to see more definitive direction around how NFTs should be classified and treated.
