Sportswear giant Nike is reportedly facing a lawsuit following the closure of its non-fungible token (NFT) business.

In 2021, Nike purchased RTFKT Studios, a collectibles firm known for creating viral sneaker designs, memes and other fashionable digital collectibles as it ventured into the metaverse, but the company shut down the project in December.

Reuters reports that investors of Nike-themed NFTs and other crypto assets led by Australian resident Jagdeep Cheema filed a suit on Friday, claiming that they suffered significant losses as demand for their digital collectibles dropped following the announcement that RTFKT was winding down its operations.

The investors say that they would not have bought the NFTs had they known that the tokens were unregistered securities. To date, the legal status of NFTs is not yet settled, and several lawsuits involve questions on whether or not these assets should be considered as securities. 

The suit also accuses Nike of orchestrating a “rug pull”, or the sudden abandonment of a project that leaves investors with worthless assets.

The plaintiffs are seeking more than $5 million in damages for the alleged violation of consumer laws in New York, California, Florida and Oregon.

Nike has not yet issued a statement regarding the lawsuit.

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Generated Image: Midjourney

The images associated with multiple Ethereum NFT collections from the Nike-acquired RTFKT—which was shuttered late last year—stopped displaying early Thursday due to an alleged issue with cloud hosting service Cloudflare.

The company’s flagship Clone X profile picture collection—created in collaboration with noted artist Takashi Murakami—and its Animus collections stopped showing their respective, colorful imagery, and instead all showed the same black background and white text as a result of its images being stored off-chain.

“This content has been restricted,” the replaced images read. “Using Cloudflare’s basic service in this manner is a violation of the Terms of Service.” 

As NFT collectors on X (formerly Twitter) took notice and began to poke fun at the issue, RTFKT Head of Technology Samuel Cardillo spoke up, saying that issue arose as a result of a Cloudflare contract erroneously ending a few days early. 

“Somehow this morning Cloudflare decided to move to the Free plan a few days before the end of the contract,” Cardillo posted on X. He added that the move was what triggered the artwork no longer showing as intended on the Ethereum NFTs.

According to Cardillo, infrastructure changes had been discussed as early as December when RTFKT was sunset, but delays kept a formal decision from being made until earlier this month.

The storage of images and other data associated with NFTs has previously been a hot topic, with many users unaware that very few NFTs place all the data associated with them—like images and metadata—on-chain along with the tokens themselves, preserving them alongside the blockchain they are associated with. 

When data is not stored on-chain, projects are reliant on third-parties to continue hosting and displaying the data, or else the non-fungibility or uniqueness of those tokens can be rendered moot.

For example, an $11 million NFT music album hosted by a central provider went missing for a time after being purchased on Nifty Gateway. And when crypto exchange FTX collapsed in late 2022, some of the NFT collections that had launched via the firm’s platform were broken due to servers no longer being online.

While images for RTFKT’s collections started to slowly reappear after Cloudflare purportedly fixed the contract issue, Cardillo is working on getting the files on-chain to avoid it from happening again. 

“I am working closely with [the] AR Drive team to decentralize both CloneX and Animus to ensure that post-April 30, no downtime of your favorite art [will] ever happen again,” he said.

AR Drive is an open-source app that utilizes Arweave’s popular decentralized storage network, allowing users to pay once to permanently store their files on-chain.

Cardillo told Decrypt that around 200GB worth of files would need to be stored, which would cost around $2,800 via AR Drive according to the price calculator on its website.

RTFKT was shut down by Nike in December, three years after the sportswear giant acquired the blockchain fashion and technology company for an undisclosed sum.

Representatives for Nike and Cloudflare did not immediately respond to Decrypt’s request for comment.

Edited by Andrew Hayward

Remember when ConstitutionDAO tried (and failed) to buy a copy of the U.S. Constitution? Well, now there’s a project aiming to do much the same with a nuclear bunker.

The creators of doomsday-themed Solana project Meatbags hope to purchase a nuclear bunker built during the Cold War in Rutland, England. To do this, 100,000 Billionaire Bunker Club NFTs will be offered for sale at $14 a pop in an attempt to raise $1.4 million, with NFT holders forming a decentralized autonomous organization or DAO collective that will vote on what to do with the property.

The site spans 1.4 acres with a nuclear bunker and former reservoir, according to SDL Property Auctions, and was built in 1960 to act as a British Royal Observer Corps (ROC) Cold War monitoring post. This was one of 1,500 underground monitoring posts built across the United Kingdom, during a time of heightened fear of nuclear war. 

Planning permission has already been secured for the site by its current owners to turn it into a luxury home with two floors of “cathedral-type ceilings,” a large glass frontage, and views across the Leicestershire countryside. Meatbags claims to have an estimate on how much these plans will cost, and the team has factored this into the NFT raising price.

The attempt recalls the well-publicized effort from ConstitutionDAO, which formed in late 2021 in an attempt to purchase a copy of the U.S. Constitution at auction.

Despite raising about $47 million to further such aims, the DAO failed to win the auction, losing out to billionaire Citadel CEO Ken Griffin. ConstitutionDAO eventually refunded its participants, which Meatbags has also pledged to do if it can’t secure the aforementioned bunker or an alternative site within six months of its bid being rejected.

But other DAO-driven efforts have had more success fulfilling their aims—such as LinksDAO, which purchased the Spey Bay Golf Club in Scotland in 2023 and is overhauling the site.

Robert, the pseudonymous co-founder and CEO of Meatbags creator Dead Bruv, told Decrypt that the team has scoped out a couple of alternatives already, some of which are also in the United Kingdom—but they’re open to landing a site elsewhere, too.

“We’re confident we’ll be able to get our hands on a bunker,” he added.

Billionaire bunker club

If the Meatbags collective successfully purchases the property as the result of the upcoming “Buy the Bunker” campaign, it will allow the newly formed DAO to vote on what will be done with the property.

“I guess the idea would be to be able to have people come to the property, stay on it. Either I think it will turn into a tourist attraction, or I think it could also go down the route of being an insane property on Airbnb,” Robert told Decrypt. “Ultimately, it’ll come down to what the DAO votes [for].”

Meatbags is a narrative-driven NFT project about doomsday preppers living in a world that is coming to an end, called Surviville, which mirrors real-world concerns like war tensions, global pandemics, and the rise of powerful AI. As such, the community already has its toe in the world of doomsday prepping—so there’s a chance the DAO could vote to use the property as a functional bunker if the worst was to happen.

Aside from participating in the DAO, Billionaire Bunker Club holders will also receive an on-chain land deed verifying that they own a share of the bunker, and will be invited to an opening party.

Robert claims to have reached out to the auctioneers via email and said they appear open to the NFT project buying the property. SDL Property Auctions did not respond to Decrypt’s request for comment.

The site is currently listed for a guide price of over £650,000 (or about $862,000) plus fees. Meatbags aims to raise $1.4 million so it can also refurbish the place, create wiggle room for negotiating, and pay management, operating, and legal fees incurred throughout the campaign. The DAO will vote on how any remaining funds will be used.

Billionaire Bunker Club NFTs will go on sale on Monday at 8am ET, with users able to purchase using Solana Pay or credit card via the Dead Bruv website. 

ConstitutionDAO fell short of its own goal, and attempting to sell 100,000 NFTs in 2025 at any price might seem like a Herculean task. Even so, the team is confident in its chances to pull this off.

“I’m about as optimistic as you can be when betting on crypto and the apocalypse at the same time,” pseudonymous co-founder and creative director Psychrome told Decrypt.

Edited by Andrew Hayward