Nike Entangled in $5M Lawsuit Over Defunct NFT Initiative

Nike is facing a $5 million lawsuit after the abrupt shutdown of its once-promising NFT project, highlighting the growing legal risks associated with the volatile digital collectibles market.

According to court documents filed this week, a group of investors has sued Nike, alleging that the company misrepresented the long-term viability and value of NFTs sold under its now-defunct initiative. The plaintiffs claim that Nike marketed the project as a revolutionary step into the metaverse, only to abandon it prematurely, leading to significant financial losses.

The lawsuit centers around Nike’s NFT venture, which launched with considerable fanfare and promised holders exclusive benefits, digital experiences, and long-term brand engagement. However, amid declining NFT market sentiment and shifting corporate priorities, Nike shuttered the project earlier this year with limited notice to investors and collectors.

Plaintiffs argue that Nike failed to deliver on its promotional promises and did not provide a viable secondary market or ongoing support for the NFTs, rendering them effectively worthless. The suit further alleges that Nike leveraged its brand power to drive initial sales without adequately disclosing the risks associated with the speculative nature of digital assets.

“Nike’s actions deprived investors of both the value of their digital assets and the promised future utility,” the complaint reads. “Had investors been properly informed, they would not have committed substantial funds to these offerings.”

Nike has yet to publicly comment on the lawsuit. However, sources familiar with the company’s internal discussions indicate that Nike will likely contest the claims, arguing that the risks of NFT investments were widely understood at the time and that the company made no binding guarantees regarding the longevity of the project.

The case underscores broader challenges facing companies that entered the NFT space during the boom years of 2021 and 2022. As the market cooled, several high-profile brands have either scaled back or quietly exited their digital asset initiatives, often leaving early adopters frustrated.

Legal experts suggest that the outcome of this case could set an important precedent for corporate accountability in the NFT sector, particularly regarding representations made to consumers about long-term project support and asset value.

For now, Nike joins a growing list of major brands grappling with the legal and reputational fallout from the rapid rise—and uneven decline—of the NFT market.