Investors have reported issues with the CloneX NFTs, including missing artwork and broken links, which were attributed to Cloudflare's restrictions.

The broader NFT market is experiencing a downturn, with total sales declining by 63% year-over-year in the first quarter of 2025, reflecting growing skepticism about the value of NFT projects.

The plaintiffs are seeking over $5 million in damages, claiming violations of consumer protection laws across multiple states, including New York, California, Florida, and Oregon.

A class action lawsuit has been filed against Nike, alleging that the company's abrupt closure of RTFKT led to a significant drop in the value of Nike-branded NFTs, resulting in millions of dollars in lost investments for buyers.

The lawsuit argues that the NFTs in question were unregistered securities, as Nike did not register them with the Securities and Exchange Commission (SEC).

Samuel Cardillo, RTFKT's head of technology, explained that the outage was caused by an unexpected early termination of a contract with Cloudflare, which has since been resolved by moving NFT files to a decentralized storage platform.

This situation draws parallels to Starbucks, which similarly abandoned its NFT initiative, Starbucks Odyssey, earlier in 2024, highlighting the challenges faced by brands in the NFT space.

As of now, Nike has not publicly responded to the lawsuit or the outage incident, leaving its legal strategy undetermined as court proceedings begin.

The Rosen Law Firm is leading the class action lawsuit, emphasizing that legal fees will be contingent on a successful outcome for the plaintiffs.

Recent technical issues have plagued RTFKT's NFT artworks, including a significant incident on April 24, 2025, when thousands of images disappeared due to a problem with their cloud service provider, Cloudflare.

While the images were eventually restored, the incident underscored the vulnerabilities within the NFT ecosystem, particularly the reliance on centralized servers for media associated with NFTs.

The legal status of NFTs remains ambiguous, with ongoing litigation questioning whether they qualify as securities under federal law, and this case emphasizes the uncertainty surrounding NFT classifications.