Neon Machine Urges Dismissal of NFT Suit Over Delayed “Shrapnel” Token Delivery
On Tuesday, March 24, 2026, Law360 reported that game development studio Neon Machine Inc. has asked a New York federal court to dismiss a lawsuit filed by an investment firm over the delayed delivery of a nonfungible token tied to its unreleased game, arguing that the claims fail to meet the standards for securities fraud.
In a motion, Neon Machine said Realm Metaverse Real Estate Inc. had been informed in 2024 that delivery of the NFT it purchased would be postponed until 2027, several years beyond the originally anticipated timeline.
The dispute centers on Neon Machine’s ongoing development of its web-based game “Shrapnel,” which has been partly funded through sales of NFTs, including virtual land assets. RMRE alleged in its complaint that it purchased one such NFT based on the company’s representations that the token would be delivered by 2023, coinciding with the game’s expected launch.
Neon Machine countered that the development of “Shrapnel” is still in progress and that neither it nor its affiliate, Oganesson Factory Ltd., currently has an obligation to deliver the NFT. The company also argued that its earlier projections regarding a 2023 “Open Beta” release were forward-looking statements and therefore not actionable under securities laws.
According to the motion, Neon Machine contended that RMRE amended its original complaint rather than responding to an earlier dismissal request because it recognized deficiencies in its claims. The company said the revised complaint remains unsupported and should be dismissed on similar grounds.
The developer further challenged RMRE’s assertion that it knew or should have known its initial timeline was inaccurate, describing the statements as part of a long-term strategy and projections about future events.
Neon Machine also argued that RMRE’s claim under the Securities Act is time-barred. It said the alleged unregistered sale of the NFT occurred in 2022 and falls outside the one-year statute of limitations. The company added that a tolling agreement entered into in March 2025 does not revive claims that were already time-barred at the time of the agreement.
Source: Law360
