Michaela
A group of investors has filed a class action lawsuit against Nike, claiming that the athletic wear company caused significant financial losses by shutting down its Web3-focused subsidiary, RTFKT, and eliminating millions of dollars in investments.
Court documents reveal that Nike allegedly “rug pulled” the community by shutting down RTFKT, severing demand for its associated digital assets. The plaintiffs argue that Nike leveraged its brand strength and marketing expertise to promote what they describe as unregistered securities, only to abruptly abandon the project.
The lawsuit also claims that Nike took advantage of the cryptocurrency surge to boost sales of non-fungible tokens (NFTs), leading investors to buy with the expectation that their value would rise due to the company’s marketing strategy.
Once Nike decided to shut down RTFKT, the incentives disappeared, leaving buyers who expected profitable resales and exclusive rewards with assets that quickly lost value.
“Because The Nike NFTs derived their value from the success of a given promoter and project – here, Nike and its marketing efforts – investors purchased this digital asset with the hope that its value would increase in the future as the project grows in popularity based on the Nike brand,” the lawsuit stated.
Furthermore, the plaintiffs argue that Nike’s NFTs qualify as securities under federal law. They further claim the company neglected to register these digital assets with the U.S. Securities and Exchange Commission (SEC) and neglected to disclose the risks involved.