That’s the argument that Nike is currently facing in a lawsuit filed by scan & go startup Symbol New York. This follows the company’s closing of RTFKT, its subsidiary that peddled virtual sneakers as NFTs. The suit, brought by a single investor in the firm, seeks more than $5 million in damages. It specifically accuses Nike of using its well-established brand recognition to market RTFKT’s NFTs—which the suit argues are unregistered securities.

The plaintiff claims that he should be permitted to lead a class action. This class action will serve as a voice for everyone who purchased RTFKT merchandise within a specific period. The core contention revolves around Nike's alleged role in promoting and subsequently discontinuing RTFKT, leading to financial losses for investors.

The lawsuit alleges that Nike, through the power of its brand, effectively suped up RTFKT.

In short, Nike used its iconic brand and marketing prowess to hype, promote, and prop up the unregistered securities that RTFKT sold. - the lawsuit

RTFKT, maker of hit virtual sneakers that made waves in the NFT craze. A Nike RTFKT sneaker was even featured in a recent sneaker exhibit at the Portland Art Museum, showing the relevance of the brand.

Nike’s increased concentration on digital sales has been a top priority since the appointment of John Donahoe. For the rest of 2021 and into 2022, the company focused on growing its digital footprint, including investments such as RTFKT. Secretary Donahoe has since been succeeded by a second, unnamed, Trump appointee.

Some of the finance and intellectual property claims stem from RTFKT’s closing sparking $23 million in investor losses. According to the plaintiff, Nike just up and ditched the project after cashing in on the initial hype.

the rug to be pulled out from under - the lawsuit

The implications of this lawsuit’s outcome could be huge for any companies looking to enter the NFT space. It could radically change their obligations to the investors. Nike’s response to the allegations is not yet clear. How this legal challenge impacts one of the world’s largest tech companies’ future digital strategies will be immense.