Eliza Labs founder Shaw Walters declared the AI16Z token dead after settling a class-action lawsuit, handing the remaining treasury to plaintiffs.
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Shaw Walters, the founder of Eliza Labs, declared the AI16Z token dead and said the foundation is winding down after settling a class-action lawsuit. The remaining treasury went to the plaintiffs as part of the settlement. The case, filed by Burwick Law in the U.S. District Court for the Southern District of New York, alleged false advertising, deceptive practices, and misrepresentation.
AI16Z launched on 24 October 2024 on Solana, marketed as the first venture-capital DAO run by autonomous AI agents. The token peaked at roughly $2.47 on 2 January 2025, reaching a market capitalization of about $2.6 billion, according to the Burwick complaint. After Andreessen Horowitz objected to the branding, the project rebranded to ElizaOS in late January 2025. A token migration executed between October and November 2025 expanded the total supply from about 1.1 billion tokens to 11 billion through a 1:10 redenomination.
Walters framed the outcome as forced capitulation. “Their claim was ridiculous, but we didn’t have the capital to legally fight it, so we settled on giving them the rest of what we had,” he posted on X. “The token is dead. Completely. The foundation is winding down.”
The Burwick complaint alleged the new allocation directed about 40% of the expanded supply to insiders, private investors, and team entities, leaving 60% for legacy holders. CoinGecko lists AI16Z as a migrated token. As of 5 August, the deprecated legacy AI16Z contract traded near $0.00032 with a market cap of about $355,000. The successor ELIZAOS token traded near $0.00031 with a market cap of roughly $2.3 million.
At least 3,945 wallet addresses sustained losses, according to the complaint. The class covered anyone who purchased AI16Z tokens between 24 October 2024 and 20 April 2026. Burwick Law maintains separate active cases against the creators of ZEREBRO, M3M3, LIBRA, HAWK, and $BELIEVE, as well as a RICO complaint targeting Pump.fun and Solana.
Walters said he plans to continue developing the open-source ElizaOS AI agent framework without any attached token. “I am starting over, and I am never letting a token come close to Eliza again,” he wrote.
No operating entity remains behind the ELIZAOS token or the deprecated legacy AI16Z token. No buybacks, treasury support, or price mechanisms are planned. Whether Burwick Law’s broader litigation campaign reshapes accountability for Solana-based token launches remains an open question for the sector.
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