Nike is being sued for more than $5 million in damages after it abruptly shut down its RTFKT unit last December. Buyers, led by an unnamed Australian plaintiff, claim millions in damages from the shutdown. They accuse Nike of violating consumer protection laws in dozens of states.
The legal wrangling follows the decision by Nike to close RTFKT, its non-fungible token (NFT) unit. Plaintiffs claim that the abrupt shutdown caused NFT holders to endure considerable monetary loss. Key to the legal challenge is this consumer protection laws. Most interestingly, it calls into question whether Nike themselves went far enough to protect the interests of those who purchased RTFKT’s digital assets.
Furthermore, the plaintiffs claim that Nike’s allegations are misleading and/or deceptive in violation of state consumer protection laws. They are not looking for RTFKT damages of more than $5 million dollars, but to be compensated for losses suffered as a direct result of the RTFKT shutdown. As the legal action spreads from state to state, so grows the misfortune befalling NFT buyers nationwide.
Beyond the NFT-marketplace ban, this case raises important legal questions about how to classify NFTs, which is still a hotly debated question. Litigation has been ongoing in an effort to clarify the status of NFTs under US federal securities law. The outcome of these legal battles could set precedents impacting the broader NFT market and how digital assets are regulated.
Nike’s surprise decision to shut down NFT subsidiary RTFKT shocked many. The company has not released a public statement regarding the lawsuit. Strikingly, they have not rebutted the plaintiffs’ detailed and specific allegations. The case is sure to be closely watched by the tech and legal communities. In doing so, it brings to the forefront key questions regarding the roles and responsibilities of corporations operating in the rapidly evolving NFT landscape.

Rohan Prasad
Crypto Feature Editor
Rohan Prasad delivers engaging, community-driven stories on crypto events, blending firsthand experience with expert commentary. Known for connecting with people across the ecosystem, he makes complex DeFi happenings accessible and fun. Outside of work, Rohan enjoys indie music and trekking in the Western Ghats.
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