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This is a segment from The Drop newsletter. To read full editions, subscribe. An RTFKT buyer in Australia is suing Nike via a proposed class-action lawsuit, accusing the apparel giant of deceptive practices, unfair competition, unjust enrichment and unlawful trade practices with its numerous NFT collections. The lawsuit, filed last week in the Eastern District of New York, alleges that Nike committed a “brazen rug pull” via its subsidiary RTFKT, pronounced “artifact,” which it acquired in late 2021.  “Nike used its iconic brand and marketing prowess to hype, promote, and prop up the unregistered securities that RTFKT sold,” the filing viewed by Blockworks alleges. The 42-page filing argues in detail that what RTFKT sold across a range of different NFT collections were actually securities under US law. But it also makes the overarching argument that even if a court finds those digital assets not to be securities, there are still five counts in the lawsuit to reckon with. It also argues that the rug pull it says occurred is a “deceptive act” in and of itself. Nike is accused of violating the New York Deceptive Acts and Practices Unlawful Act, the California Unfair Competition Law, the Florida Deceptive and Unfair Trade Practices Act, and the Oregon Unlawful Trade Practices Act.  It further alleges “Unjust Enrichment,” accusing Nike of further “enriching” itself with the NFT buyers’ funds. The dispute is over a minimum of $5 million, but the filing does not specifically state a dollar amount of damages desired.   Nike made piles of cash from RTFKT. One dashboard found that the CloneX “Mintvials” generated over $80 million in revenue alone. RTFKT trading activity peaked in 2022, but it had substantially subsided by 2023. The CloneX avatars made with artist Takashi Murakami were the most successful collection by far. RTFKT then announced…

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Filed under: News - @ April 29, 2025 6:27 pm