The NFT market is crashing! Nike (NKE.US) quietly sells digital products subsidiary RTFKT

The Zhitong Finance App learned that Nike (NKE.US) confirmed on Wednesday that it had sold its digital product subsidiary RTFKT in December last year. Nike said in a statement that the sale of RTFKT marks the next chapter for the company and its community, and said it will continue to invest in launching innovative products and experiences in physical, digital and virtual environments, without disclosing specific buyers and terms of the deal.

Nike announced the acquisition of RTFKT in December 2021, describing it as a leading brand using cutting-edge innovation to provide next-generation digital collectibles that blend culture, gaming, and sports. According to reports, the purchase amount was tens of millions of dollars. At the time, CEO John Donahoe saw the deal as a move to accelerate Nike's digital transformation and expand its presence in the virtual product field, and planned to invest in RTFKT's community and capacity building.

RTFKT, founded in 2020, is famous for virtual sneakers and NFTs, particularly the CloneX series in collaboration with Japanese artist Takashi Murakami. At the time of the boom in the NFT market, Nike saw RTFKT as a bridgehead for entering Web3.

However, as the NFT market took a sharp turn, the RTFKT platform's demand and pricing capacity both shrank. In 2024, Nike issued a signal to reduce investment in the NFT business, stating that it will suspend production of new NFTs while maintaining some gaming/virtual cooperation projects. In December of that year, Nike suddenly shut down RTFKT and was subject to a class action lawsuit by relevant NFT holders, alleging that the company's failure to disclose risks caused investors to suffer significant losses.

The plaintiff alleges that Nike's failure to register its NFTs as securities violates US securities regulations and that failure to fully disclose the risk of project termination is misleading consumer behavior. They said that if they knew in advance that these tokens were unregistered securities and that Nike would “suddenly leave the market,” they would never buy these NFTs at the price at that time or at any price. The lawsuit alleges that Nike allegedly violated consumer protection laws in New York, California, Florida, and Oregon. The amount of the claim was unspecified, but it exceeded $5 million.

It's worth mentioning that Nike isn't the only traditional industry giant to suffer setbacks in the Web3 space. In recent years, many traditional companies, including Starbucks (SBUX.US), Game Station (GME.US), Budweiser, and Disney (DIS.US), have tried to enter Web3 through NFTs, blockchain, or the metaverse, but many projects have failed due to market fluctuations, regulatory challenges, or immature business models.