Shaw Walters, founder of Eliza Labs and the open-source ElizaOS framework, has announced that the Eliza token is effectively finished and that the project’s foundation is being shut down following a legal settlement.
In a post on X, Walters said the foundation transferred its remaining treasury and available funds to settle a lawsuit filed by Burwick Law. He explained that the project could not afford to continue fighting the case, even though he believes the claims lacked merit.
According to Walters, the settlement involved handing over “the rest of the treasury and all the money” the foundation had to a group of token holders.
The lawsuit, filed in April in federal court in New York, accused Walters, Eliza Labs, and related parties of false advertising, deceptive business practices, negligent misrepresentation, and unjust enrichment.
The complaint alleged that the project marketed itself as an autonomous AI-managed investment fund while remaining under the control of Walters and insiders. It also challenged the project’s transition from the ai16z token to ElizaOS, claiming the migration harmed existing holders.
Walters said the project did not have the financial resources needed to continue the legal battle and chose settlement instead.
He also rejected claims that he personally benefited from the project, stating that he never sold his ai16z holdings and only received what he described as a modest engineering salary.
With the foundation winding down, Walters made it clear that support for the Eliza token has ended.
He said there will be no buybacks, treasury support, or other measures aimed at supporting the token’s value. Walters stated that he no longer owns any Eliza tokens and has no plans to support the asset in the future.
He described the token as “dead” and advised holders to make their own decisions about whether to keep or sell their tokens because there is no longer a foundation behind the project.
Walters also said he has no intention of launching another token connected to Eliza. He blamed much of the situation on what he sees as a highly speculative crypto culture that often focuses more on token prices than technology development.
Despite ending support for the token, Walters confirmed that development of the ElizaOS software will continue.
He said his focus remains on building open-source AI agent technology that gives users more control over their data and supports locally operated AI systems that can interact with blockchain networks.
ElizaOS was introduced as an open-source platform for building AI agents capable of working with smart contracts, decentralized applications, and blockchain ecosystems such as Solana, Ethereum, and TON.
The project originally launched in October 2024 as ai16z, presenting itself as an AI-managed decentralized investment organization. It later rebranded to ElizaOS and shifted its focus toward AI agent development and deployment.
Although the foundation is now being dissolved and the token has lost official support, Walters said the engineering work behind ElizaOS will continue independently. He added that his team plans to keep developing AI technology and contributing to open-source projects regardless of the token’s future.
