Nike Sued Over NFT Outage

Nike is facing a $5 million lawsuit following a recent Cloudflare outage that temporarily wiped out the digital images associated with its CloneX NFT collection. The incident, which occurred on April 24, sent shockwaves through the NFT community, underscoring the vulnerabilities inherent in relying on centralized infrastructure for supposedly decentralized assets. This article delves into the details of the outage, the subsequent legal action, and the broader implications for the future of NFTs.

The Cloudflare Outage and Its Impact 📉

On the morning of April 24, 2025, users discovered that the images linked to Nike's **CloneX NFTs** had vanished, replaced by a message indicating that Cloudflare had restricted the content due to a violation of its terms of service. These NFTs, avatars created by RTFKT, a digital fashion studio acquired by Nike in 2021, suddenly became visually inaccessible on major marketplaces like OpenSea and Blur. The outage affected over 19,000 NFTs, leaving collectors in a state of panic. The root cause was a **Cloudflare account downgrade** that occurred prematurely, triggering a bug that prevented the images from being streamed. Samuel Cardillo, RTFKT's head of technology, clarified that the issue wasn't due to unpaid bills but rather a timing misalignment in the service downgrade. This incident highlighted a significant vulnerability: while NFTs are recorded on the blockchain, the actual media files are often hosted on centralized servers. If these servers experience downtime or hosting fees lapse, the visual content can disappear, rendering the NFTs essentially worthless from a visual standpoint. The temporary disappearance of the **NFT images** served as a stark reminder of the fragility of digital assets and the reliance on centralized systems.

The $5 Million Lawsuit Against Nike ⚖️

The fallout from the Cloudflare outage has escalated into a legal battle. On April 25, a group of investors filed a class-action lawsuit against Nike in Brooklyn federal court, seeking over $5 million in damages. The plaintiffs, led by Australian resident Jagdeep Cheema, allege that Nike's abrupt closure of RTFKT caused significant financial losses for **NFT holders**. The lawsuit claims that Nike promoted the NFTs as valuable digital assets, only to subsequently abandon the project, effectively

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