Nike has been hit with a proposed class action lawsuit in Brooklyn federal court, as disgruntled buyers of its branded non-fungible tokens (NFTs) and related crypto assets allege the company caused significant financial losses by unexpectedly shutting down its digital division, RTFKT.
Led by Australian plaintiff Jagdeep Cheema, the lawsuit claims that Nike’s abrupt decision to wind down RTFKT operations in December 2024 caused a collapse in demand for the NFTs, leaving buyers with assets that rapidly lost value. The plaintiffs argue that they would not have purchased the tokens—especially at premium prices—had they known the assets were allegedly unregistered securities or that Nike would later “pull the rug out from under them.”
The legal complaint accuses Nike of violating consumer protection laws across several states, including New York, California, Florida, and Oregon. The buyers are seeking over $5 million in damages.
Nike’s Crypto Retreat Reflects Broader Corporate Pullback From Web3
Nike’s legal troubles over the abrupt shutdown of RTFKT’s NFT operations reflect a broader trend unfolding across the crypto and Web3 space, where companies that rushed into NFTs during the 2020–2022 boom are now scaling down or exiting entirely as the market contracts.
Following the collapse in NFT demand, several major platforms have either closed or dramatically cut back their NFT initiatives. Earlier this month, Bybit announced the closure of its NFT marketplace, inscription platform, and decentralized offering services, citing a strategic decision to streamline operations amid waning user interest. Similarly, Kraken began winding down its NFT marketplace in late 2024, reallocating resources to other growth areas after disappointing performance in the digital collectibles sector.
GameStop, once a high-profile entrant into NFTs, also exited the space. After launching an NFT platform in 2022, the gaming retailer first shut down its crypto wallets in 2023 citing “regulatory uncertainty,” and then fully closed its NFT marketplace in early 2024.
These retrenchments are backed by troubling data across the sector. According to industry reports, roughly 96% of NFT collections are now considered “dead”—exhibiting little to no trading activity. Daily NFT trading volumes have plunged by over 70%, falling from $18 million to around $5 million, and high-profile NFT initiatives like the Australian Open’s “Artball” project have seen valuations crash by as much as 90%.
Legal battles are increasingly accompanying this market downturn. Beyond Nike, cases like the NFL Players Association’s $65 million lawsuit against DraftKings over its abandoned “Reignmakers” NFT project highlight how the rapid retreat from Web3 experiments is creating contractual and reputational fallout for major brands.
Crypto Sector Resilience Remains as Institutional Bets Continue
Despite the retrenchment from some major brands, the broader crypto sector remains resilient. Institutional players continue to deepen their involvement, particularly through regulated financial vehicles like Bitcoin ETFs and blockchain infrastructure investments.
Asset managers such as BlackRock, Fidelity, and Bitwise are actively expanding offerings tied to digital assets, while banks like JPMorgan have scaled up blockchain-based payment pilots.
Moreover, a growing segment of companies—including Shopify, Stripe, and PayPal—are embracing stablecoin payments and digital asset settlement as pragmatic innovations, even as hype-driven NFT projects lose momentum.
In short, while speculative consumer-facing crypto ventures are seeing pullbacks, the foundation of digital asset adoption in mainstream finance appears to be steadily solidifying.
Quick Facts
- Nike faces a proposed class action lawsuit over the shutdown of its RTFKT crypto division, with buyers seeking over $5 million in damages.
- Plaintiffs allege that Nike misrepresented its long-term commitment to Web3 and NFTs, causing significant financial harm to buyers.
- Nike’s exit mirrors a broader corporate pullback from Web3 initiatives amid collapsing NFT demand and shifting market priorities.
- Despite brand exits, institutional adoption of blockchain technology—through stablecoins, Bitcoin ETFs, and infrastructure projects—continues to accelerate.
