Shaw Walters, founder of Eliza Labs, has declared the ELIZAOS cryptocurrency token “dead” after a class-action settlement used up the project’s remaining treasury, bringing an end to one of the most prominent AI-agent cryptocurrency projects of the past two years.
In a lengthy post on X on 4 August, Walters said the foundation behind the token was winding down, while stressing that the open-source ElizaOS software would continue to be developed.
“The token is dead. Completely. The foundation is winding down,” he wrote.
Walters ruled out any attempt to revive the cryptocurrency, saying there would be no buybacks, supply reduction or replacement token. He added: “I am starting over, since I own the IP, and I am never letting a token come close to Eliza again.”
He also told remaining ELIZAOS holders not to expect further financial support. The project, he said, had “no foundation and no supply coming to save you”, because the treasury no longer contained the resources needed to support the token.
Walters is the founder of Eliza Labs and the main creator of ElizaOS, an open-source framework that enables developers to build autonomous AI agents. Those agents can interact with social media platforms, blockchain networks and digital wallets.
The framework first gained prominence alongside AI16Z, a token launched on Solana in late 2024 during a surge of interest in cryptocurrencies linked to AI agents.
At its height, the wider group of Eliza-related tokens, including AI16Z, reached an estimated combined market valuation of between $2.4bn and $2.5bn. A forced rebrand, a token migration and a prolonged market decline subsequently wiped out almost all of that value.
ELIZAOS, which continues to trade, has fallen by more than 97% from its peak and now represents only a small fraction of its former valuation.
Walters blamed a federal class-action lawsuit brought by Burwick Law for the foundation’s decision to give up its remaining funds. He said the legal dispute left the project with no realistic way to finance a lengthy defence.
“Their claim was ridiculous, but we didn’t have the capital to legally fight it so we settled on giving them the rest of what we had,” Walters wrote.
The case alleged misleading marketing, deceptive business practices and harm to investors connected with the AI16Z project and its subsequent migration to ELIZAOS. According to Walters, the settlement exhausted the treasury and left nothing available for future token support or the operation of the foundation.
Despite abandoning the cryptocurrency, Walters said Eliza Labs would continue working on its underlying technology. His stated long-term aim is to develop open-source AI software that gives users more control over their personal data and digital assistants.
“We’re still building Eliza and the underlying OS, faster and better than ever,” he wrote.
The team plans to continue developing local, private and crypto-enabled AI agents, regardless of what happens to the token.
Walters also criticised the speculative culture he believes has developed around cryptocurrency projects. He argued that the focus on token prices and short-term gains distracted from efforts to create useful technology. By contrast, he said the AI developer community remained more focused on building products.
The announcement formally separates the ElizaOS software from its cryptocurrency. ELIZAOS and the original AI16Z token can still be traded, but neither has official backing from Walters’ foundation.
The future of ElizaOS is now likely to depend on whether developers continue to use and improve the framework without an associated token. Walters said the software could continue evolving for years through open-source development, leaving its long-term legacy tied more to adoption of the technology than to the cryptocurrency that helped make it widely known.
The source material also refers to a Coldcard exploit that prompted dormant bitcoin to move into exchanges, multi-signature wallets and new addresses.
