- Main players include Jagdeep Cheema and Nike, Inc.
- Claim of over $5 million in damages.
- Lawsuit could reshape NFT securities definitions.
Nike Inc. is under legal scrutiny as a class action lawsuit was filed on April 25, 2025, accusing the company of orchestrating a “rug pull” by shutting down the RTFKT NFT studio.
Nike’s decision
Nike’s decision to shut down the RTFKT NFT platform was met with backlash, leading to a lawsuit in Brooklyn federal court. The plaintiffs claim Nike’s actions led to financial losses for investors who held RTFKT NFTs.
Jagdeep Cheema
Jagdeep Cheema, the lead plaintiff, represents affected RTFKT users. Nike acquired RTFKT during the NFT boom but announced a shutdown in early 2025, despite anticipation for continued operations.
We are seeking damages for the significant financial losses incurred due to Nike’s abrupt decision to close RTFKT, which we believe amounts to a rug pull. – Jagdeep Cheema, Lead Plaintiff
The market responded negatively, with the value of RTFKT’s digital collectibles decreasing significantly. Investors are seeking over $5 million in damages, alleging that Nike’s hype influenced their purchase decisions.
Securities classification
Securities classification is a central issue in this lawsuit, as the plaintiffs argue that Nike’s NFTs are unregistered securities. Legal experts highlight this case’s potential to set precedents in NFT regulation. Immediate implications include increased scrutiny on NFT offerings and their classification as securities. Some in the industry argue this could lead to more comprehensive regulations to safeguard investor interests. The outcome of this case could signal pivotal changes in how NFTs are governed legally.
