Eliza Labs shuts down ELIZAOS foundation and tells token holders to sell
Founder Shaw Walters said the foundation will end support, buybacks and supply measures for ELIZAOS while the software project continues without a replacement token.
Eliza Labs is closing the foundation that supported ELIZAOS, ending the token's buybacks and other supply measures and telling holders to sell. Founder Shaw Walters said the token is “dead” and that the software project will continue without a new token or a foundation-managed replacement.
ELIZAOS was trading at a market capitalization of roughly $2.3 million after the announcement, down about 97% from its peak, according to CoinDesk's market report. The token replaced AI16Z, which reached a market value of about $2.39 billion on Jan. 2, 2025, when daily volume was reported at $291 million.
A token project separated from its software
Walters attributed the shutdown to litigation. The foundation transferred its remaining treasury and funds to settle with holders represented by Burwick Law, according to the account. The proposed class action in the Southern District of New York alleges false advertising, deceptive practices, negligent misrepresentation and unjust enrichment.
The complaint describes the project as having been marketed as an “autonomous, AI-run venture fund” and alleges that holders were diluted during the migration from AI16Z to ELIZAOS. The original AI16Z name also drew an objection from venture firm Andreessen Horowitz, whose commonly used a16z brand was similar.
What survives the collapse
The shutdown draws a sharp line between the Eliza software and the financial claims built around its token. The codebase can keep developing, but there will no longer be a foundation promising token support, treasury actions or a mechanism to manage supply. That distinction matters for users who still want the tools but no longer have a project treasury behind the asset.
It also leaves holders with a legal and operational question rather than a market one: how the settlement process will work, what assets remain in the foundation and which claims can be resolved. Eliza Labs and Burwick Law did not immediately respond to requests for comment cited in the report.
