MechaFightClub NFT Game ‘Paused Indefinitely’ Due to US ‘Regulatory Limbo’

Irreverent Labs, the company behind the NFT game MechaFightClub, has announced that it is halting development indefinitely due to uncertainty around the future of crypto in the United States. The game was designed to feature AI-controlled mechanical roosters battling it out in the “Cocktagon.” However, regulatory challenges have made it difficult for blockchain companies to operate in the US, leading to the game being “trapped in regulatory limbo.” The company claimed that the lack of clarity in the regulatory and operations environment around blockchain within the US has made it impossible to create an in-game economy without concerns about regulatory ramifications.

Irreverent Labs CEO and co-founder Rahul Sood said that moving the game to other jurisdictions would require much of the senior team to move out of the US for a period of time, making the decision to halt development the only viable option. The shutdown was Irreverent’s own decision, but the company will not sell the MechaFightClub brand because it is “too close to the soul of our company.” Sood added that the game had reached “alpha” status, meaning that it was playable and feature-complete but still missing considerable content and polish. While MechFightClub may “re-surface in the future in a different form,” the team has not yet made a decision.

Prior to the announcement, the NFTs for MechaFightClub were selling for around 7 SOL, but the company is now offering to buy them back for 18 SOL each. The game’s NFTs have since been hidden from sale on NFT marketplace Magic Eden. The regulatory crackdown by the SEC has ramped up its enforcement actions against crypto startups and platforms in the US, alleging broad violations of securities laws.

Despite the shutdown of MechaFightClub, Irreverent Labs is pivoting toward artificial intelligence. Sood told Decrypt that the company has made a “significant breakthrough” in its AI model, which can create short-form videos from images. The studio plans to release it later this year under new branding. MechaFightClub was initially well-funded, with a $40 million funding round led by venture capital firm Andreessen Horowitz (a16z) in 2020, but now the community is winding down. While the future of crypto in the US remains uncertain, companies like Irreverent Labs are looking for new ways to innovate and thrive.