Shaw Walters, founder of the crypto AI-agent project Eliza, said this week that the project's token is "dead" and its foundation "winding down," after settling a lawsuit he said cost the project its entire remaining treasury.

The pronouncement could mark the conclusion of a dramatic journey for the token, which launched in late 2024 as AI16Z (a sly reference to the venture-capital firm Andreeseen Horowitz, often referred to as a16z) and quickly shot to a staggering market value over $2.5 billion. The token later migrated to a new ELIZAOS ticker, now trading at a $1.9 million valuation.

In a long post on X, Walters said the firm Burwick Law "sued us and we settled with a group of holders for the rest of the treasury and all the money we had." He called the claim "ridiculous" but said Eliza lacked the capital to fight it.

Burwick Law, a plaintiffs' firm known for crypto class actions, filed the proposed class action in April, naming Walters, Eliza Labs and others. It alleged the project falsely marketed its ai16z token as an autonomous, AI-managed venture fund and that a token migration steered 40% of newly minted supply to insiders.

Walters said he never sold his own ai16z tokens and drew only "a modest salary," on par with the project's other engineers.

"The token is dead. Completely," he wrote, saying he is starting over because he owns the intellectual property. "I am never letting a token come close to Eliza again," he added, saying he no longer owns any tokens.

He told holders there would be no foundation, no buybacks and "no supply coming to save you."

'Worst scammer ever'

Walters used much of the post to rebut accusations that the project was a scam.

"If I am a scammer then I am the dumbest and worst scammer ever," he wrote, saying he once held $25 million in his wallet and "ran it to 0."

"The most expensive thing I own is my MacBook," he wrote. "I don't own a car, I live in a small bedroom in SF with my wife, I write code and work almost all day every day. I don't desire luxuries or wealth, and if I had more money I'd put it all back into Eliza and funding other developers."

He was less forgiving of the token's holders. "A bunch of people will surely take this opportunity to point out some hypocrisy or some small grievance," he wrote, "but it all boils down to a culture of people who don't take responsibility for their gambling habits."

Walters said Eliza and its underlying operating system remain in active development, "faster and better than ever," and that he would return to a token "one day when the culture has grown past this point."

HOW AI WAS USED IN THE PRODUCTION OF THIS PIECE: The first draft of this story was written on Claude Desktop using a custom skill that turns company and executive posts on X into news stories, with background drawn from prior DeAI News coverage and Burwick Law's own filing notice. I then used our Distro Publisher MCP connector to file the story as a draft on DistroVerse, our web app. I used the native (non-AI) DistroVerse story editor to edit the piece, and I checked the facts prior to publication.