Nike Accused of Misleading NFT Investors in New $5M Lawsuit

Nike is facing a new lawsuit from NFT investors, who claim they were misled by the sportswear giant and suffered major financial losses after its digital collectibles venture was shut down.

The suit, which was filed on Friday by Australian investor Jagdeep Cheema, follows a report by Bloomberg on Monday.

According to the lawsuit, buyers of Nike-themed NFTs suffered substantial financial losses after RTFKT Studios, Nike’s digital collectibles arm, was shut down.

Nike had acquired RTFKT in 2021 as part of its broader move into the metaverse. However, the company officially wound down the project last year.

The suit argues that investors were misled, stating they would not have purchased the NFTs if they had known about the possibility of the tokens being considered unregistered securities.

The suit also notes that U.S. courts have not yet fully determined how NFTs should be classified, with the ambiguity sparking a series of similar lawsuits.

Furthermore, the lawsuit accuses Nike of carrying out a “rug pull” — abruptly abandoning the project and leaving NFT holders with assets that quickly plummeted in value.

The plaintiffs are seeking over $5 million in damages, citing alleged violations of consumer protection laws in New York, California, Florida, and Oregon.

The lawsuit comes as the legal landscape surrounding cryptocurrencies and blockchain technology continues to evolve rapidly.output: Named in the suit are Jagdeep Cheema, who is an Australian investor, and several unnamed plaintiffs. The suit was filed in a New York federal court.

It remains to be seen how this lawsuit will play out and whether the plaintiffs will be successful in recovering any damages from Nike.