Jonathan Stempel
NEW YORK (Reuters) – Nike was sued on Friday by buyers of Nike-themed non-fan tokens (NFTs) and other cryptocurrency assets.
In a class action proposal filed in Brooklyn in New York federal court, a buyer led by Australian resident Jagdeep Cheema said the sudden closure of Nike’s RTFKT unit in December has drained demand for NFTs.
They said that if the token was an unregistered securities and Nike knew that “the rug would be pulled out from under them,” they would never have bought the NFT at the price they had done.
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Beaverton, Oregon-based Nike did not immediately respond to requests for comment. Philip Kim, the plaintiff’s lawyer, declined to comment.
The NFTS’ legal status is unstable and there have been many lawsuits over whether it is a securities under federal law.
The lawsuit Friday sought unspecified damages in excess of $5 million in damages due to alleged violations of New York, California, Florida and Oregon consumer protection laws.
Nike acquired RTFKT, pronounced “Artifact” in December 2021, saying that fashion brands are leveraging “the cutting edge innovations to provide the next generation of collectibles that combine culture and games.”
We announced RTFKT’s winddown on December 2, 2024, and we predict that RTFKT’s signature innovation will continue to live through the inspirational “number of creators and projects.”
Cases include: US District Court, Cheema v Nike Inc, No. This is 25-02305.
(Reporting by Jonathan Stempel of New York, edited by Cynthia Osterman)