Nike's NFT Artwork Disappears Due to Cloudflare Issue
The proposed class-action lawsuit against Nike highlights the need for greater transparency and regulation in the NFT market, and the importance of decentralized storage solutions to prevent issues like the one experienced by RTFKT's NFT artwork, which was caused by a contract ending a few days early and the reliance on third-party hosting, and has sparked outrage among CloneX holders, including one who spent $1.25 million on a CloneX NFT, and are seeking over $5 million in damages for alleged violations of consumer protection laws.
Nike-owned RTFKT's NFT artwork stopped displaying due to a Cloudflare issue, which arose from a contract ending a few days early, leaving over 19,800 digital avatars affected, including the popular CloneX avatars, which are now part of a proposed class-action lawsuit against Nike.
The issue was caused by the images being stored off-chain, making the collection reliant on third-party hosting, and RTFKT's Head of Technology, Samuel Cardillo, stated that the issue has been resolved and they are working to move the files on-chain using AR Drive's decentralized storage network to prevent future downtime. The incident has sparked outrage among CloneX holders, including one who spent $1.25 million on a CloneX NFT.
The proposed class-action lawsuit, filed in the US District Court for the Eastern District of New York, alleges that Nike misled buyers about the security and value of its NFTs, and that they would not have purchased them if they were aware of the regulatory risks or the planned closure of Nike's RTFKT unit. The plaintiffs claim that Nike's NFTs constituted unregistered securities and are seeking over $5 million in damages for alleged violations of consumer protection laws in New York, California, Florida, and Oregon.
RTFKT's CloneX avatars reappeared after being blacked out by Cloudflare for violating its terms of service, and Cardillo attributed the issue to changes with RTFKT's Cloudflare setup, not a missed payment. Cloudflare fixed the issue, and most avatars have reappeared. The incident highlights the risks associated with NFTs and the importance of decentralized storage solutions, such as AR Drive, to prevent future downtime and ensure the longevity of digital assets.
As the NFT market continues to evolve, it is essential for companies like Nike to prioritize the security and transparency of their digital assets, and for buyers to be aware of the potential risks and regulatory complexities involved in purchasing NFTs, including the potential for class-action lawsuits and the importance of decentralized storage solutions to prevent issues like the one experienced by RTFKT's NFT artwork.