Nike (NKE.US) confirmed on Wednesday that it had divested its digital product subsidiary RTFKT in December of last year. In a formal statement, the company indicated that the sale of RTFKT marks the next chapter for both the corporation and its associated community, while also affirming its continued commitment to investing in innovative products and experiences across physical, digital, and virtual environments; however, specific details regarding the buyer and the transaction's financial terms were not disclosed. Nike had originally announced the acquisition of RTFKT in December 2021, portraying it as a leading brand that leverages cutting-edge innovation to deliver next-generation digital collectibles that merge culture, gaming, and sports. The reported acquisition price was in the tens of millions of dollars. At that time, CEO John Donahoe viewed the transaction as a strategic move to accelerate Nike's digital transformation and expand its footprint in the virtual product space, with plans to invest in RTFKT's community and capabilities. Founded in 2020, RTFKT gained prominence for its virtual sneakers and NFTs, particularly the CloneX collection created in collaboration with Japanese artist Takashi Murakami. The acquisition occurred during the peak of the NFT market frenzy, with Nike positioning RTFKT as a beachhead for its entry into the Web3 ecosystem. However, as the NFT market experienced a sharp downturn, both demand and pricing power on the RTFKT platform significantly contracted. In 2024, Nike signaled a reduction in its NFT investments, announcing it would pause the production of new NFTs while continuing to support some gaming and virtual collaboration projects. That same December, Nike abruptly shuttered RTFKT, which subsequently led to a class-action lawsuit from disgruntled NFT holders who alleged the company failed to disclose risks, resulting in substantial investor losses. The plaintiffs claimed that Nike's failure to register its NFTs as securities violated U.S. securities laws and that the insufficient disclosure of the project's termination risk constituted misleading consumer practices. They asserted that had they known these tokens were unregistered securities and that Nike would "suddenly pull out," they would never have purchased the NFTs at their original prices, or at any price. The lawsuit accuses Nike of violating consumer protection laws in New York, California, Florida, and Oregon; while the exact damages sought were not specified, they are believed to exceed $5 million. It is noteworthy that Nike is not the only traditional industry giant to face setbacks in the Web3 arena. In recent years, several established companies, including Starbucks (SBUX.US), GameStop (GME.US), Budweiser, and Disney (DIS.US), have attempted to enter the Web3 space through NFTs, blockchain, or the metaverse, but many of these initiatives have ended in failure due to market volatility, regulatory challenges, or immature business models.