Nike is facing a lawsuit following its decision to shut down RTFKT (pronounced as “Artifact”), the digital collectibles brand it acquired in 2021. The complaint, filed this week in Brooklyn federal court, accuses the company of causing significant financial losses for purchasers of Nike-themed non-fungible tokens (NFTs) and other assets tied to the crypto-focused brand.
The lawsuit was brought by a group of buyers led by Australian resident Jagdeep Cheema, who allege that Nike’s abrupt closure of RTFKT in December 2024 caused the value of their digital assets to collapse. They claim they would not have purchased the NFTs at the prices they did, or at all, had they known the tokens were “unregistered securities” and that the apparel maker would later “pull the rug out from under them.” The legal action seeks unspecified damages exceeding US$5 million, citing violations of consumer protection laws in New York, California, Florida and Oregon.
— RTFKT (@RTFKT) December 2, 2024
To recap, Nike originally acquired RTFKT in December 2021, promoting the brand’s “cutting-edge innovation” as it aimed to merge culture, gaming and next-generation collectibles. However, the partnership struggled to gain long-term traction. By 2 December 2024, the company announced via RTFKT’s X account that it would wind down operations by the end of January 2025, stating that the brand’s spirit would live on through the broader creative community it inspired.
According to The Verge, RTFKT’s digital projects appeared to be maintained by a single individual, Samuel Cardillo, following the shutdown. Cardillo spent time addressing disruptions, highlighting the difficulties faced by the remnants of the once-promising venture.
Nike has not yet commented on the lawsuit. Meanwhile, legal questions continue to surround NFTs, as U.S. courts grapple with whether such assets qualify as securities under federal law.
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