Open-source AI agent framework ElizaOS founder Shaw Walters announced that the ELIZAOS token is “completely dead” and that the Eliza Foundation will cease operations. The foundation has used its remaining treasury and available funds to settle a class-action lawsuit brought by token holders represented by Burwick Law, leaving it without the capital to continue operating or supporting the token.
Shaw Walters Announces the Token Is “Completely Dead”
ElizaOS founder Shaw Walters announced that the ELIZAOS token is “completely dead” and that the Eliza Foundation will cease operations. Specific statements include the following: the team will not invest additional funds to buy back tokens, adjust the token supply, or support the market price; Walters himself no longer holds the relevant tokens and will not launch another crypto asset tied to the Eliza brand; the foundation’s remaining treasury has been fully committed to the settlement; and holders should no longer expect any measures to rescue the token’s market.
Walters stressed that the foundation’s cessation of operations does not mean development of the ElizaOS open-source software will stop, and that the token and the technology project will officially operate separately.
Burwick Law Class-Action Lawsuit: Settlement Amount Not Disclosed
Burwick Law filed a class-action lawsuit in the U.S. District Court for the Southern District of New York in April 2026. The defendants include Walters, Eliza Labs, AI16Z DAO, token issuance platform DAOs.fun, and other related parties.
The lawsuit’s main legal claims are as follows:
· False advertising
· Deceptive business practices
· Negligent misrepresentation
· Unjust enrichment
The plaintiffs claim that the project described AI16Z as a venture capital fund autonomously operated by artificial intelligence, while actual control was held by the development team and insiders. They also allege that the market may have mistakenly believed the project was associated with venture capital firm Andreessen Horowitz because of the similarity in the brand names.
Walters believes the lawsuit lacks a reasonable basis, but the team lacked the funds to continue the legal battle and therefore chose to settle. The settlement agreement does not represent an admission of the allegations by the defendants, and the total settlement amount and distribution method have not yet been disclosed.
Token Evolution: ELIZAOS Market Cap Fell by About 97% After AI16Z Migration
The project was initially launched on Solana in October 2024 under the name AI16Z and was positioned as a decentralized venture capital organization in which AI agents participated in investment decisions. The Eliza AI agent framework attracted market attention amid the AI agent boom. The market cap of the AI16Z token rose to approximately $2.4 billion in early 2025, making it one of the largest AI agent-themed tokens at the time.
Andreessen Horowitz later demanded that the project stop using similar branding, so the project was renamed ElizaOS in 2025, and AI16Z was migrated to ELIZAOS. Following the migration, the token supply increased from 1.1 billion tokens to 11 billion tokens, with approximately 40% allocated to the team, treasury, and investors. The plaintiffs believe this diluted the holdings of existing token holders.
The market cap of ELIZAOS subsequently declined steadily, reaching only approximately $2.3 million when Walters announced the end of support—a decline of about 97% from its peak.
FAQ
Why did the ElizaOS founder announce that support for the token would end?
According to Shaw Walters’ statement, the Eliza Foundation will use its remaining treasury and available funds to settle the class-action lawsuit brought by token holders represented by Burwick Law, leaving the foundation without the capital to continue operating. Walters said he believes the lawsuit lacks a reasonable basis, but the team did not have the funds to continue the legal battle.
What did the Burwick Law class-action lawsuit allege?
According to the lawsuit filed in April 2026 in the U.S. District Court for the Southern District of New York, the allegations include false advertising, deceptive business practices, negligent misrepresentation, and unjust enrichment. The plaintiffs claim that AI16Z was described as an AI-operated venture capital fund, while actual control was held by the development team and insiders.
Will development of the ElizaOS open-source software continue after the declaration that the token is dead?
According to Walters’ statement, development of the ElizaOS open-source software will continue. Walters retains the relevant intellectual property rights and will continue maintaining the open-source AI agent framework, but future product development will no longer depend on token financing or price performance.
