Nike accused of ‘brazen rug pull’ in class action lawsuit
The suit alleges RTFKT assets are securities and that Nike conducted a “scheme to mislead and deceive” with its short-lived crypto push
slvn_an/Shutterstock and Adobe modified by Blockworks
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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 it was shutting down in December 2024, just three years after Nike acquired it. No reason for the shutdown was provided.
RTFKT Head of Tech Samuel Cardillo declined to comment. Cardillo has publicly referred to himself as “the last man standing” at the Nike subsidiary.
Blockworks reached out to Nike as well as RTFKT cofounders Chris Le and Benoit Pagotto for comment. Le’s Linkedin shows that he left RTFKT and Nike in January 2025, but Pagotto’s profile still shows him as employed at Nike and RTFKT.
Last week, a day before the lawsuit was filed, the art for the CloneX RTFKT NFTs disappeared overnight due to an issue with its Cloudflare hosting plan. Cardillo later said the issue was due to an error, not an unpaid bill. The collection’s art was then subsequently restored. Cloudflare did not reply to Blockworks’ previous request for comment.
On Monday, Cardillo said the CloneX NFTs had migrated (off Cloudflare) to Arweave for “permanent storage.”
If this lawsuit progresses, it won’t be the only class-action suit about an NFT “rug pull.” The class-action lawsuit against Logan Paul’s CryptoZoo NFT game remains ongoing as well.
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