ELIZAOS token crashes 97%, founder declares project dead
In brief
- ELIZAOS token declared dead by founder Shaw Walters; foundation closing with no buyback support planned.
- Token crashed 97% from $2.4 billion peak to $2.3 million market cap in 19 months.
- Class action lawsuit alleged false advertising and insider control despite autonomous marketing claims.
The shutdown
Walters said there would be no further foundation support, buybacks or supply measures, with plans to continue building the software without launching another token. The founder attributed the closure to litigation, saying the foundation transferred its remaining treasury to settle with holders represented by Burwick Law.
A proposed class action was filed in the Southern District of New York in April, alleging false advertising, deceptive practices, negligent misrepresentation and unjust enrichment. The complaint claimed the project marketed itself as an autonomous, AI-run venture fund even though Walters and other insiders controlled it. It also alleged that holders were diluted during the migration from AI16Z to ELIZAOS.
Walters stated he once held tokens worth approximately $25 million in his wallet and watched their value fall toward zero. The personal loss underscores the scale of the collapse.
The rise and rebrand
AI16Z launched on Solana in October 2024 with a pitch centered on an AI agent running a venture-style fund. The token reached $2.39 billion on January 2, 2025, when daily volume hit $291 million.
The rebrand to ELIZAOS followed objections from venture capital firm Andreessen Horowitz over the original name. By late December, the AI16Z daos.fun vehicle held more than $22 million in user-supplied tokens and was due to expire in October 2025. The timing made the legal pressure especially acute for Walters and his team.
