Nike, like many others, tried to cash in on the NFT boom a few years ago. Now it has been hit with a class action lawsuit from NFT owners. Buyers of digital assets have accused the company of abruptly shutting down the RTFKT virtual shoe project. According to The Verge, the plaintiffs claim that they would not have invested in the tokens if they had known that they were unregistered securities.
Image source: Nike
The RTFKT project was founded in 2020 and quickly became known for creating virtual shoes, clothing, and accessories for digital worlds (metaverses). In December 2021, Nike, riding the wave of general excitement, acquired the project and began offering NFT owners the opportunity to order a physical version of their digital assets, such as real sneakers that matched the NFT image. However, in December 2023, the company announced that it was shutting down the project.
The lawsuit was filed in federal court in the Eastern District of New York. The buyers are seeking more than $5 million in damages, accusing Nike of violating consumer protection laws in New York, California, Florida and Oregon.
Despite its ambitious plans, Nike failed to realize the potential of RTFKT. The project’s official X account announced that operations would cease by the end of January this year, disappointing NFT holders who had been counting on the long-term growth of digital assets.
Since the project’s demise, it appears to have been maintained by just one employee: Samuel Cardillo. This week, he has been single-handedly dealing with the problems of the CloneX NFT collection, which suddenly disappeared and then reappeared, causing panic among investors.
The digital asset industry, which experienced a hype in 2021-2022, is now in decline, with many investors left holding devalued tokens, and the story of RTFKT is yet another example of large corporations trying to make money on NFTs. Earlier, Starbucks suffered a similar failure with the Odyssey project.
Nike has not yet commented on the lawsuit. However, the lawsuit could set a precedent for other companies that issue or have issued NFTs.