TL;DR
- Shaw Walters declared that the native token of Eliza Labs is “dead” and announced the closure of the foundation associated with the project.
- The team used the remaining treasury and available funds to reach a settlement with the plaintiffs represented by Burwick Law in a federal class action lawsuit.
- Walters confirmed that he will not launch or endorse any token linked to the project in the future, although he will continue developing the open-source framework.
Shaw Walters, founder of Eliza Labs and of the artificial intelligence agent framework ElizaOS, publicly announced that the native token associated with the project is “dead” and that the linked foundation will begin its closure process. The announcement was made through an extensive post on platform X, in which Walters detailed the circumstances that led to this decision.
According to the founder, the law firm Burwick Law filed in April 2025 a federal class action lawsuit before the U.S. District Court for the Southern District of New York. The complaint targeted Walters, Eliza Labs and other affiliated entities for false advertising, deceptive practices, negligent misrepresentation and unjust enrichment.
I guess I should say something about the token
Look. I worked my ass off to the point I got a frozen shoulder and severe health issues from overworking and typing, and it was never enough
We built cool shit but it was completely ignored because number down
It felt like the…
— Shaw (spirit/acc) (@shawmakesmagic) August 4, 2026
The lawsuit alleged that the project was falsely marketed as an autonomous fund managed by artificial intelligence when, in reality, it was controlled by Walters and other insiders. It also pointed to a dilution of holders during the token migration from ai16z to ElizaOS, a process that was triggered after the firm a16z objected to the project’s original name.
The Settlement that Emptied Eliza’s Treasury
The team used the remaining treasury and all available funds to reach an out-of-court settlement with the group of holders behind the lawsuit. “Their claim was ridiculous, but we didn’t have the capital to fight it legally, so we agreed to give them what we had left,” Walters wrote in his post. The founder clarified that he never sold his ai16z tokens and that his income was limited to a salary similar to that of the other engineers on the team.
Walters was categorical regarding the token’s future: there will be no buyback purchases, no supply support measures and no form of institutional backing. At the same time, he made clear that the technical work will continue without interruption. “We will keep building Eliza and the underlying operating system, faster and better than ever,” he wrote, adding that the team intends to keep local, private and blockchain-enabled agents accessible to any user.
The project was originally launched in October 2024 on Solana under the name ai16z, with the goal of creating an autonomous decentralized organization managed by artificial intelligence.
