Nike Is Now Facing a Lawsuit From Its NFT Customers Due to 'Rug Pull'

Nike is now facing a lawsuit that was filed last week by a group of customers who previously bought non-fungible tokens (NFTs) from the company.

This is because Nike recently shut down RTFKT, the virtual project which centered on their NFT ventures that began in 2021.

The case, which was filed with New York's Eastern District, saw the proposed class action asking for $5 million in unspecified damages, with the claims centering on the alleged violations made by the company in California, Florida, New York, and Oregon consumer protection laws.

It is also named in the lawsuit that the customers were not informed by Nike that the company sold them "unregistered securities," and had they known this, they would not have bought the digital tokens from the company.

Nike's NFT Program to End in 2025

Earlier this year, Nike announced that their NFT program would be shutting down its operations by the end of January 2025, with the program running under the company's acquisition, RTFKT.

The company advertised massive opportunities for their NFT program, saying that they would be digital representations of their shoes that would also join EA Sports games as collectibles.

The customers, who are seeking class-action status, said that they were enticed by Nike's marketing efforts to buy the NFTs, but later learned that the company had no intention of continuing the program for long.

The report adds that the customers are seeking restitution for the money they invested in the NFTs, as well as any other damages that they sustained due to Nike's actions.

The lawsuit comes as many companies and investors are facing lawsuits over their involvement in the NFT industry. Earlier this year, a group of investors sued Yuga Labs, the parent company of Bored Ape Yacht Club, claiming that they were defrauded by the company's executives.

The lawsuit against Nike is still in its early stages, and it remains to be seen how it will play out. However, it could have implications for other companies that are planning to or currently engaging in NFT ventures.