Nike is facing a class-action lawsuit accusing the company of pulling a "rug pull" after abruptly shutting down its NFT platform, RTFKT, earlier this year. A group of RTFKT users, led by Jagdeep Cheema, filed the lawsuit in Brooklyn federal court on April 25, claiming they suffered "significant damages" after investing in Nike’s sneaker-themed NFTs—only to see the platform shut down.

The lawsuit alleges that Nike sold these NFTs as unregistered securities, sidestepping the necessary registration process with the Securities and Exchange Commission (SEC). It also accuses the brand of using its global reputation and marketing clout to promote and sell these digital assets without proper oversight.

According to the plaintiffs, the value of Nike’s NFTs was heavily tied to the brand’s success and marketing efforts. Buyers were led to believe their investments would grow over time as Nike expanded its presence in the digital space.