# Nike Faces Lawsuit Over RTFKT NFT Project Closure

## Nike Faces Lawsuit Over RTFKT NFT Project Closure

Nike is embroiled in a legal battle with NFT buyers who allege the company “pulled the rug out from under them” by winding down its virtual division, RTFKT. The proposed class action lawsuit, filed in New York’s Eastern District, seeks over $5 million in damages for alleged violations of consumer protection laws in New York, California, Florida, and Oregon, as reported by *Reuters*.

The plaintiffs claim they wouldn’t have invested in Nike’s NFTs had they known they were considered “unregistered securities.” This stems from Nike’s decision to acquire RTFKT in 2021, a move intended to establish a foothold in the burgeoning metaverse market. However, much like Starbucks’ NFT venture, Odyssey, the project failed to gain significant traction. In December, Nike announced plans to cease RTFKT operations by the end of January, marking an abrupt end to its foray into the virtual world.

Since the planned shutdown, RTFKT’s online presence appears to be maintained by a single individual, Samuel Cardillo. Recent activity on RTFKT’s X account, managed by Cardillo, revealed anxieties over the temporary disappearance and subsequent reappearance of artwork associated with the CloneX NFTs project. This incident further fuels concerns about the future of the RTFKT ecosystem and the value of its digital assets.

The lawsuit raises questions about the responsibility of companies venturing into the volatile NFT market. The outcome could set a precedent for future legal challenges related to abandoned NFT projects and the classification of digital assets as securities. It also highlights the risks associated with investing in emerging technologies, where companies can pivot strategies, leaving investors holding potentially worthless digital collectibles.