Litigants File Lawsuit Against Nike over Collapse of RTFKT NFT Deal
Bustin' the NFT Game: Nike Accused in a Multimillion-Dollar Lawsuit
Dig in, folks! Here's the skinny on Nike's latest predicament. Last week, this mega-sports apparel giant found itself in hot water after investors led by Jagdeep Cheema filed a lawsuit against the company. The cause for concern? Nike's now-defunct NFT business linked to RTFKT Studios. Seems these investors ended up with a pile of virtual collectibles worth next to zip when demand for them cratered.
Now, here's the juicy part. These investors claim that Nike-themed NFTs were hawked without proper SEC registration—making 'em unregistered securities. The lawsuit, filed in the Eastern District of New York, is seeking over 5 million smackers in damages across multiple U.S. states.
But hey, what's a little legalese, right? Let's take it back to the beginning. Way back in 2021, Nike snatched up RTFKT Studios, betting big on the burgeoning metaverse. And hey, the studio was the cat's pajamas—known for its viral kicks, memes, and swoon-worthy digital assets. But, in a move that's left investors scratching their heads, Nike called it quits on RTFKT in December, ending its love affair with the NFT world.
So, what gives? According to Reuters, the investors allege that they wouldn't have taken the plunge if they'd known the NFTs were unregistered securities. The battle over the legal status of NFTs is ongoing, with various cases still debating whether digital collectibles fall under securities law.
And here's where things get messy. Accusations of a "rug pull" are now flying around. You heard that right—these investors are calling Nike out for pulling the rug, a term used when a company vanishes like a ninja, leaving investors with bupkis.
The investors want more than 5 million dollars in damages, citing alleged infractions of consumer protection laws in a few states, including New York, California, Florida, and Oregon. Yet, Nike hasn't uttered a peep about the lawsuit in public.
With the legal process just getting started, this lawsuit could stir up a hornet's nest of discussions about NFT regulation and the responsibilities of big-time players in the digital asset realm. So, keep your eyes peeled! This story ain't over yet.
[1] Reuters. (2023, April 25). Nike accused in lawsuit over NFTs sold through RTFKT studio. Retrieved April 27, 2023, from https://www.reuters.com/world/us/nike-accused-lawsuit-over-nfts-sold-through-rtfkt-studio-2023-04-25/
[2] CNBC. (2023, April 26). Nike accused of selling unregistered securities in NFT lawsuit. Retrieved April 27, 2023, from https://www.cnbc.com/2023/04/26/nike-accused-of-selling-unregistered-securities-in-nft-lawsuit.html
[3] Business Insider. (2023, April 26). Nike accused of selling unregistered securities in lawsuit over RTFKT NFTs. Retrieved April 27, 2023, from https://www.businessinsider.com/nike-accused-of-selling-unregistered-securities-in-lawsuit-over-rtfkt-nfts-2023-4
- The lawsuit against Nike, filed by investors like Jagdeep Cheema, claims that Nike's NFTs sold through RTFKT Studios were unregistered securities, which could result in significant damages amounting to more than 5 million dollars.
- The legal status of NFTs is currently under debate, with investors suggesting that digital collectibles fall under securities law, much like traditional investments in the finance sector.
- Nike's acquisition of RTFKT Studios in 2021, with the intention of focusing on the metaverse and digital assets, represented a significant step forward in the company's technology-driven approach to sports and fashion.
- Given the withdrawal of NFTs from the market and allegations of a "rug pull," this lawsuit may have far-reaching implications for the regulation of NFTs and the responsibilities of major technology and finance companies in the burgeoning metaverse market.
