Nike is being sued by investors who claim the company pulled the rug out from under them after shutting down its NFT business.
Investors Claim “Rug Pull”
The lawsuit, filed by a group of investors led by Australian resident Jagdeep Cheema, alleges that Nike’s abrupt closure of its RTFKT Studios NFT project caused significant losses. RTFKT, a company Nike acquired in 2021, created digital collectibles like virtual sneakers. The investors argue they wouldn’t have bought the NFTs if they’d known the project was going to be shut down. They accuse Nike of a “rug pull,” a term for abandoning a project and leaving investors with worthless assets.
Legal Questions Surround NFTs
The lawsuit also raises questions about the legal status of NFTs. The plaintiffs claim the NFTs were unregistered securities, a point of contention in many current NFT-related lawsuits.
Significant Damages Sought
The investors are seeking over $5 million in damages, claiming violations of consumer laws in several states including New York, California, Florida, and Oregon. Nike has yet to respond to the lawsuit.