Nike, one of the world’s largest luxury fashion brands and once a crypto market investor, has been served with a class action lawsuit for abandoning the purchasers of its Nike-themed non-fungible tokens and other crypto items. The NFT and crypto traders have complained that they suffered massive losses after the closure of the RTFKT, its digital asset incubation studio, and NFT marketplace.
👟 Nike faces a $5m lawsuit from investors claiming its abrupt NFT venture shutdown caused heavy financial losses.#Nike #NFTshttps://t.co/QueluJPH7I
— Cryptonews.com (@cryptonews) April 28, 2025
Fashion Brand Nike Sued Over RTFKT Closure
On Friday, April 26, 2025, a group of crypto and non-fungible token investors, led by Australian resident Jagdeep Cheema, filed a class action before the Brooklyn, New York, federal court against Nike. In the proposed charge sheet, these investors complained that they suffered massive losses when the athletic wear company and fashion brand ‘Nike’ abruptly closed RTFKT, the business that created Clone X digital assets.
The Nike-themed NFT investors started getting agitated last week after a heated debate erupted on X after some crypto and non-fungible token users noticed a strange error on the Clone X non-fungible token collections. In the Clone X NFT collection, there is no visible art, with non-fungible token holders left only broken links and NFT production numbers. Nike defended the error, blaming Cloudflare for restricting access to the artwork for the CloneX NFT collection.
> Be CloneX> Make $81.3M from NFT sales> Get another $37.8M from royalties> Airdrop sneaker coupons> Go silent> Shut down> Don’t pay for servers> Holders left with a broken link and a dream pic.twitter.com/rSWxHrTWte
— Pix🔎 (@PixOnChain) April 24, 2025
Founded sometime in 2020, RTFKT was a digital asset incubation studio, acknowledged in the NFT market for leveraging in-game engines, world-class design, and AR to create one-of-a-kind digital assets. RTFKT started rising in popularity after the launch of the Clone X non-fungible token collection. Clone X is an NFT collection featuring a limited edition of 20,000 NFTs hosted on the Ethereum blockchain network.
The CloneX NFT collection continued to gain traction among traders, with its floor price value surging to record heights. At the time, Clone X recorded some jaw-breaking sales from its rarest NFTs. At the top of the list was Clone X #4594, which sold for 450 ETH in 2022. Clone X #13134 sold for 368 ETH. The rest of the top 10 most expensive Clone X NFTs traded over $500,000 worth of ETH.
By the time 2021 rolled around and the NFT craze had reached fever pitch, RTFKT became such a big hit that Nike acquired it before the year’s end. The NFT studio continued to establish itself in 2021, selling over $3.1 million worth of its NFT sneakers. Besides the famous CloneX NFT collection, RTFKT has since launched many NFT collections, including the CryptoKicks NFT collection.
Through its time in the Web3 limelight, RTFKT NFT Studios demonstrated a deep understanding of how to harness the power of hype and leverage it into long-term success. Before exiting the NFT market, the NFT studio RTFKT made over $5 million from selling non-fungible token collections and other crypto assets. The iconic fashion brand ‘Nike’ closed down its NFT studio RTFKT on December 2, 2024.
pic.twitter.com/ySShPa0I7r
— RTFKT (@RTFKT) December 2, 2024
NFT Traders Want Their Funds Back
In the case “Cheema v Nike Inc, U.S. District Court, Eastern District of New York, No. 25-02305,” the purchasers of Nike-themed non-fungible tokens and other cryptocurrency assets sought unspecified damages of more than $5 million for alleged violations of New York, California, Florida and Oregon consumer protection laws. Nonetheless, these NFT traders have deeply regretted trusting Nike.
In a short presser with Reuters, they said they would never have bought the NFTs at the prices they did, or at all, had they known the tokens were unregistered securities, and that Nike would “cause the rug to be pulled out from under them.” In the meantime, Nike, based in Beaverton, Oregon, has not responded to requests for comment. Phillip Kim, a lawyer for the plaintiffs, has also declined to comment.
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