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Welcome back to the Now Newsletter. I’m Matt Medved.
The crypto masses have officially descended on Dubai for TOKEN2049. Never been a big fan of the city, to be honest. Always felt like a construct to me: a glittering hallucination in the sand, engineered by oil barons and architects on amphetamines.
I remember my first visit in 2015. I went snowboarding indoors at the Mall of the Emirates, only to realize I was being watched by diners at a nearby Applebee’s. Late-stage capitalism at its finest.
Vegas gives me the same vibe. An adult amusement park built in the desert, where the house always wins and no one asks how it got built. I actually DJed at EDC Vegas a few years back, and the whole thing felt like a surreal fever dream. I’ll be there next month for the Bitcoin conference.
So maybe it makes sense that crypto loves these places. They’re not grounded in reality. They’re built on hopium — crypto’s favorite drug.
Speaking of high-stakes bets: Nike is facing a $5 million class-action lawsuit over its shuttered RTFKT NFT project, with plaintiffs accusing it of hyping digital assets and then walking away. The case could set major precedent for how corporate-backed NFTs are marketed — and discarded. More on that below.
Meanwhile, crypto artist Alpha Centauri Kid is showing that not everything onchain is vapor. With big secondary sales and a breakout moment at Carnegie Hall, ACK’s market is heating up fast. Let’s dive in.
⚖️ Unpacking Nike’s RTFKT Lawsuit
In one of the most closely watched legal battles in crypto, Nike is facing a $5 million class action lawsuit from RTFKT NFT holders who claim the sportswear giant executed a “soft rug pull” — hyping digital assets with brand power and promises of long-term utility, only to abandon them once priorities shifted. The outcome could set a precedent not just for NFT classification under U.S. law, but also for how legacy brands are held accountable in web3.
Rather than dust off my own (somewhat neglected) law degree, I spoke with Carlo D’Angelo — a seasoned crypto lawyer, former law professor, and author of The DeFi Defender newsletter — who joined me from TOKEN2049 in Dubai to unpack the case’s implications for Nike, RTFKT holders, and the future of corporate-backed digital assets.
Matt Medved: What does it mean to accuse Nike of a “soft rug pull” legally? How will each side argue their case?
Carlo D’Angelo: A “soft rug pull” differs from a pump-and-dump scheme, where the NFTs go to zero immediately after launch. When alleged in a lawsuit, a “soft” rug refers to an NFT project that slowly — but intentionally or recklessly — abandons its long-term roadmap and perceived value, leaving holders with worthless assets.
The plaintiff NFT holders will likely argue that Nike’s marketing created a reasonable expectation that the brand would continue to support and grow the NFT project, and that by ultimately shutting it down, Nike allegedly “rugged” holders, causing financial losses. Nike will likely deny such claims and instead argue that the RTFKT NFTs were not securities but rather mere collectibles, and that the company had no legal obligation to sustain or indefinitely support the project if it was no longer financially viable.
How strong is the claim that these NFTs are unregistered securities given the current SEC? How will it be determined by courts?
Whether Nike marketed and sold the RTFKT NFTs as securities will be up to the court, not the SEC, to decide. I suspect the court will likely consider the recent wave of crypto and NFT cases dismissed by the SEC for guidance on how to determine whether the RTFKT NFTs were sold as investment contracts under the Howey Test. Given the current pro-crypto policy shifts at the SEC under the Trump administration, plaintiffs may face an uphill battle in proving to the court that these NFTs were marketed as investment contracts under the elements of the Howey Test.
“Given the current uncertainty around how courts will ultimately classify NFTs, plaintiffs may have difficulty proving that Nike’s NFTs were sold as securities.”
CARLO D’ANGELO
The lawsuit claims Nike’s marketing “hyped, promoted, and propped up” NFTs without proper disclosures. What specific legal obligations could Nike have violated here?
The Nike class action lawsuit doesn’t hinge solely on whether the NFTs were marketed and sold as unregistered securities. Plaintiffs also allege that Nike’s broader marketing of the RTFKT NFTs misled investors with promises that were false or incomplete — claims that, if proven, could suggest Nike not only violated securities laws but also state consumer protection statutes. This two-pronged litigation strategy may give plaintiffs a chance to recover damages even if the court finds the RTFKT NFTs were not sold as securities.
Does Nike’s shutdown of RTFKT strengthen the plaintiffs’ case?
Nike’s ultimate shutdown of the RTFKT brand may strengthen plaintiffs’ claims that collectors reasonably relied on Nike’s ongoing efforts to sustain the future value of the project.
The suit references consumer protection violations across multiple states — how does that broaden Nike’s potential legal exposure?
By strategically pleading consumer protection violations under New York and California law, plaintiffs have broadened Nike’s exposure beyond federal securities laws. This strategy may allow plaintiffs’ claims to proceed even if the court rules that the RTFKT NFTs were not sold as securities. This two-front approach exposes Nike to potential damages under broader and more flexible consumer protection laws.
What do you believe the outcome will be and why?
Given the current uncertainty around how courts will ultimately classify NFTs, plaintiffs may have difficulty proving that Nike’s NFTs were sold as securities. If the court does strike down the securities count, plaintiffs may still have a viable path to recover damages under the consumer protection count.
How could this lawsuit impact the broader landscape of web3 and corporate adoption/acquisition?
If the plaintiffs prevail in their lawsuit against Nike, it could have a chilling effect on future corporate NFT ventures and acquisitions. Brands may become reluctant to launch an NFT collection that lives permanently on-chain for fear they will be forced to perpetually support and fund that collection, even if it no longer aligns with their financial bottom line.
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