MechaFightClub NFT Game 'Paused Indefinitely' Due to US 'Regulatory Limbo'

By Kate Irwin

MechaFightClub, an NFT game from Irreverent Labs on Solana, is halting development indefinitely because its makers believe that crypto’s future in the United States is too uncertain right now amid regulatory challenges.

“We don't see a clear path forward to launch the economy from the U.S.,” Irreverent Labs CEO and co-founder Rahul Sood told Decrypt of the decision to cease development.

“Moving it to other jurisdictions would require much of the senior team to move out of the USA for a period of time,” he added.

MechaFightClub (MFC) was a planned cock-fighting video game that leveraged artificial intelligence and would see mechanical roosters battle it out in the “Cocktagon.” Sood told Decrypt that the shutdown was Irreverent’s own decision, but that it will not sell the MFC brand because it is “too close to the soul of our company.”

He added that the game had reached "alpha" status, which typically means that it's playable and feature-complete, but may still be missing considerable content and polish. Sood said that MechFightClub may "re-surface in the future in a different form," but that the team hasn't decided yet.

The company shared the news of MechaFightClub’s shutdown Thursday night along with the promise that it will buy back any mechabot NFTs for 18 SOL each—roughly $365 apiece—from May 15 until June 29.

Prior to the announcement, the NFTs were selling for around 7 SOL, less than half of that price, on NFT marketplace Magic Eden. The MFC NFTs have since been hidden from sale on Magic Eden.

SEC's crypto crackdown

Irreverent Labs claimed in an open letter that the game was “trapped in regulatory limbo." In recent months, the United States Securities and Exchange Commission (SEC) has ramped up its enforcement actions against crypto startups and platforms in the country, alleging broad violations of securities laws.

“The regulatory and operations environment around blockchain within the USA has drastically changed in the last two years,” Irreverent Labs wrote in its letter.

“We are an American company, and a lack of clarity is making it difficult for blockchain companies to operate here," Irreverent Labs added. "In the current regulatory confusion, we simply couldn’t create an in-game economy without concern about the regulatory ramifications."

On Irreverent’s Hundred Year Podcast this week, just days before the news of MFC’s shutdown, Sood said that he believes that SEC Chair Gary Gensler “owes his job to Elizabeth Warren” and argued that Gensler and U.S. Senator Warren want to “kill crypto because they think it’s all a scam.”

Now that MFC is shutting down, Sood is pivoting Irreverent Labs more fully toward artificial intelligence instead. Sood told Decrypt in a direct message that Irreverent has made a “significant breakthrough” in its AI model, which he said can create short-form videos from images. The studio plans to release it later this year under new branding.

Hope for MFC was short-lived, but fervent—just one year ago, the firm announced a hefty $40 million funding round lead by venture capital firm Andreessen Horowitz (a16z), with Solana Ventures, CAA founder Michael Ovitz, Bollywood actress Sonam Kapoor, Infinity Ventures founder Brian Lu, and others investing.

Decrypt reached out to Andreessen Horowitz for comment, but did not receive an immediate response.

The VC firm's General Partner Arianna Simpson wrote last year that at first, she thought the game “sounded weird,” but then invested because she believed the team was “serious” and “capable,” and had a good sense of humor along with a thriving Discord server community.

Now, that community is winding down—but at least cock-holders can part ways with their robo-chickens and try to find fun elsewhere.

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