Eliza token declared “dead” as founder winds down foundation after legal settlement

Shaw Walters, founder of Eliza Labs and the open-source ElizaOS framework, has declared the Eliza token “dead” and confirmed the foundation has begun winding down after settling a lawsuit by transferring its remaining treasury and available funds.

According to a post published by Walters on X, the settlement followed a lawsuit brought by Burwick Law, which he said the project could not afford to contest despite believing the claims lacked merit. He added that the agreement transferred “the rest of the treasury and all the money” the foundation had to a group of token holders.

The announcement ends foundation support for the token while separating its future from the Eliza open-source software project, which Walters said will continue under his control because he owns the underlying intellectual property. He said he has no intention of supporting another token tied to Eliza.

Burwick lawsuit led to treasury settlement

Burwick Law filed a federal class action lawsuit in April in the U.S. District Court for the Southern District of New York against Walters, Eliza Labs and affiliated parties. The complaint accused the project of false advertising, deceptive acts and practices, negligent misrepresentation and unjust enrichment.

According to the lawsuit, the project promoted itself as an autonomous AI-managed venture fund governed by an independent AI agent while allegedly remaining under the control of Walters and other insiders. The filing also challenged the project’s token migration from ai16z to ElizaOS, claiming the process diluted existing holders after venture capital firm Andreessen Horowitz objected to the original ai16z branding.

Walters said on X that the project lacked the financial resources to continue the legal fight and instead settled by handing over the remaining treasury.

He also rejected suggestions that he personally profited from the project, saying he never sold his ai16z holdings and received only what he described as a modest salary comparable to other engineers on the team.

Eliza token support has ended

Alongside confirming the foundation’s closure, Walters said holders should not expect buybacks, treasury support or any mechanism designed to support the token’s price.

He wrote that the token is “dead” and described it as “completely ngmi,” adding that he no longer owns any tokens and will not back the asset in the future. Walters advised holders to either sell their tokens or manage them independently because, according to him, there is no foundation left to provide financial support.

His post also blamed what he described as speculative trading culture and constant criticism from parts of the crypto community for influencing his decision to leave token-related projects behind. Walters argued that much of the criticism came from investors unwilling to accept losses from speculative trading rather than from people interested in the technology itself.

According to the statement, he has ruled out launching another token connected to Eliza and said any future work around the project will remain separate from crypto assets.

ElizaOS development will continue without a token

While ending support for the token, Walters said development of ElizaOS itself will continue.

He said his long-term focus remains building open-source AI agent software capable of giving users greater control over their own data and enabling locally operated, crypto-enabled AI agents. He added that Eliza would continue building independently even if another open-source project eventually surpassed it, saying the team would contribute to whichever open-source effort best advanced the technology.

The comments are consistent with the direction the project outlined earlier. In January 2025, ElizaOS released a technical whitepaper describing the platform as an open-source operating system for AI agents capable of interacting with blockchain networks, smart contracts and decentralized applications.

The paper said the framework was built with a modular architecture consisting of a Runtime, Adapter, Character, Client and Plugin system, allowing developers to customize AI agents without modifying the core software. It also outlined support for ecosystems including Solana, Ethereum and TON, alongside integrations with AI models from OpenAI, Llama and Qwen.

At the time, the roadmap also included Hierarchical Task Networks, a planning system intended to help AI agents break complex objectives into smaller executable tasks.

Eliza project has changed since the ai16z launch

The project first launched on Solana in October 2024 as ai16z, presenting itself as an AI-managed decentralized autonomous organization and venture-style investment fund where an autonomous AI agent would help guide investment decisions and governance.

Its identity expanded during the rebrand to ElizaOS in early 2025, when the project repositioned itself as a platform for creating, deploying and managing AI agents rather than focusing on a single AI-managed investment vehicle.

The migration also increased the token supply from 6.6 billion to 11 billion units, with circulating supply rising to about 7.4 billion tokens, according to project documentation released during the transition. Developers said the expanded platform would allow AI agents to be created, tokenized and deployed across different use cases while continuing development of the underlying open-source framework.

Although the foundation is now being wound down, Walters said the engineering work will continue. In his post, he described artificial intelligence development as more constructive than the current crypto environment and said his team would keep building Eliza every day without returning to a foundation-backed token model.