How Lawsuits and Low Volume Pushed Nike to Drop NFTs

However, the volatility of the NFT market soon exposed its weaknesses. By 2024, NFT trading volumes had plummeted, and many projects failed to deliver lasting value. Total NFT trading volume is much lower now than at the peak in 2021.

The NFT Speculative Bubble Bursts, Brands Flee

One prominent case is Nike, which shuttered RTFKT in December 2024, triggering a class-action lawsuit in April 2025 in Brooklyn, New York. Led by Australian investor Jagdeep Cheema, the lawsuit alleges Nike caused RTFKT NFTs to plummet from an average of 3.5 ETH ($8,000) in 2022 to 0.009 ETH ($16) in 2025.

Plaintiffs claim Nike sold “unregistered securities,” resulting in over $5 million in damages. This case highlights a broader legal issue: the unclear status of NFTs as securities, which continues to fuel litigation across the U.S.

Similarly, Starbucks terminated its Odyssey NFT program in March 2024, just two years after its launch. Starbucks exit reflects the difficulty of integrating NFTs into everyday consumer experiences, particularly when technical complexities deter mainstream users.

DraftKings also faced controversy when it shut down Reignmakers in July 2024, leading to a $65 million lawsuit from the NFLPA. The association accused DraftKings of breaching its contract by refusing to honor payment commitments, arguing that the declining NFT market was no excuse.

Meanwhile, PUMA and Reebok have gone quiet. PUMA‘s Super PUMA NFT project, launched in 2023 to celebrate its 75th anniversary, generated initial buzz but has seen no further updates. Similarly, Reebok’s NST2 collection, created with rapper A$AP NAST in 2021, sold out in minutes but was not followed by new projects. The silence from both brands signals caution as the NFT speculative bubble deflates and consumer interest fades.

Why Are Brands Choosing to Retreat？

Several factors explain this retreat. First, the NFT market became oversaturated with projects lacking unique value, causing trading volumes to collapse.

Second, legal and regulatory uncertainty exposes brands to litigation risks. The lawsuits against Nike and DraftKings exemplify the dangers of operating in an undefined regulatory space.

Third, technical issues, such as RTFKT NFTs failing to display after Nike shut down servers, have eroded consumer trust and revealed the fragility of centralized NFT platforms.

Finally, high blockchain transaction costs and environmental criticisms of Ethereum networks have discouraged brands and consumers.

The retreat of major brands does not signal the death of NFTs. It merely indicates a shift toward more sustainable models.

“The next wave of growth isn‘t about chasing a trend—it’s about unlocking new types of ownership and access that feel native to the internet generation” Alexander Salnikov, co-founder of Rarible said in an exclusive interview with BeInCrypto.

Projects offering tangible utility, such as in-game assets or loyalty programs with clear benefits, are more likely to endure. Brands may also pivot to hybrid strategies, blending physical and digital experiences to avoid the pitfalls of purely speculative NFTs.