Nike Faces RTFKT Lawsuit: A Significant Turning Point in the Web3 World

In December 2024, sports brand giant Nike found itself embroiled in a $5 million class-action lawsuit. The plaintiffs are the holders of the NFT brand RTFKT, which it acquired in 2021. They accuse Nike of exploiting its brand influence and long-term vision to hype RTFKT NFTs, only to ultimately abandon the project, constituting what is referred to as a "soft carpet pull."

RTFKT is a company focused on digital fashion and technology, which has rapidly established a large Ethereum ecosystem since entering the NFT market, including NFTs and physical collectibles, and has collaborated with renowned artists. However, on December 3, 2024, RTFKT announced it would gradually cease operations, leading to dissatisfaction among holders.

This lawsuit has become one of the most high-profile legal battles in the cryptocurrency space and could serve as an important precedent for U.S. courts to comprehensively examine the nature of NFTs and brand liability, having far-reaching implications for the compliance boundaries of traditional enterprises in the Web3 industry.

Definition and Controversy of "Soft Rug"

A "soft rug pull" is not a violent sell-off, but rather a gradual and deliberate deviation from the original development path by the project team, leading to a gradual loss of NFT value. The plaintiffs believe that Nike's brand promotion led users to reasonably expect that the project would continue to develop, and the project's shutdown resulted in actual losses.

Nike's possible defense strategies include:

• Arguing that RTFKT's NFTs are "collectibles" rather than securities
• Emphasize that the company has no legal obligation to indefinitely operate commercially unsustainable projects.

Legal Focus: Do NFTs Constitute Unregistered Securities?

The court will determine whether RTFKT NFTs are sold as "investment contracts" based on the "Howey test." Although the U.S. SEC ( has recently adopted a more lenient stance on crypto policies, the court will make an independent judgment, unaffected by the SEC's views. Experts believe that the plaintiffs may face significant challenges in proving that these NFTs are considered securities.

Consumer Protection: Another Path for Litigation

The plaintiff team adopts a "dual-path" strategy:

1. Accusation that Nike did not adequately disclose information when promoting NFTs.
2. Citing state consumer protection laws, accusing Nike of failing to fulfill its promise of "future availability and ongoing support".

Even if the plaintiff fails in the "securities designation," they may still obtain compensation through consumer protection.

The Impact of RTFKT Shutdown

The official shutdown of the RTFKT brand is viewed by the plaintiffs as key evidence that Nike has abandoned the project and violated its promotion. Holders believe that their purchase of these digital assets was based on a reasonable expectation that Nike would continue to invest resources and support the ecosystem.

Potential Impact on the Web3 World

Regardless of the outcome of the judgment, this case will serve as a warning to the brand.

• Businesses in the Web3 space may face stricter scrutiny.
• Be cautious when committing to "ongoing support" and "future features" when launching NFTs.
• May lead to a decrease in the overall willingness of the brand to invest in NFTs.

Conclusion

Nike's RTFKT NFT case is not just an ordinary legal dispute, but will have far-reaching implications for the Web3 world:

1. Whether NFTs constitute securities in judicial definitions.
2. The Long-term Responsibility of Traditional Brands for Digital Assets
3. How can enterprises balance innovation and legal risks in Web3

In the future, every "first issue, then plan" NFT project may face more legal challenges and accountability. This case may become an important turning point in the development of Web3.