After legal settlement, the founder gradually closed the foundation and Eliza token was declared "d

The founder of Eliza Labs declares the token "dead" and the foundation is dissolved after liquidation.

Shaw Walters, founder of Eliza Labs and the open source ElizaOS framework, announced that the Eliza token has "died" and confirmed that the foundation has transferred the remaining treasury and available funds after resolving a lawsuit and is currently gradually disbanding.

Summary

Eliza founder Shaw Walters announced that the project token is dead and said the foundation is being dissolved following a legal settlement. Walters stated that the remaining treasury had been diverted to resolve the lawsuit filed by Burwick Law because the project could not afford the costs of responding. Foundation support, repurchase and other token support measures have been terminated, and Walters said it will not launch another token related to Eliza. Although the token has ceased to operate, the development of the open source ElizaOS AI proxy framework will continue independently under Walters 'leadership.

According to Walters 'social media posts, the settlement originated from a lawsuit filed by Burwick Law. He said that although he believed the allegations were unfounded, the project could not afford the costs of responding to the lawsuit. He added that the settlement transferred "all remaining treasury and all funds of the foundation" to a group of token holders.

On August 4, 2026, Walters wrote on social media: "I think I should talk about tokens. Listen, I work so hard that my shoulders freeze, and I have serious health problems from overwork and typing, but it's never enough. We made great things, but it was completely ignored because the numbers were falling. It feels like..."

The announcement terminated the foundation's support for the token while separating it from the Eliza open source software project in the future. Walters said the project will continue to be under his control because he owns underlying intellectual property. He said he had no intention of supporting another token related to Eliza.

Burwick litigation leads to treasury settlement

Burwick Law filed a federal class action lawsuit against Walters, Eliza Labs and related parties in the U.S. District Court for the Southern District of New York in April 2025. The indictment alleges the project with false publicity, deceptive acts and practices, negligent misrepresentation and unjust enrichment. According to litigation documents, the project claims to be an autonomous AI venture capital fund managed by an independent AI agent, but is actually still controlled by Walters and other insiders. The indictment also challenges the token migration process for the project to migrate from ai16z to ElizaOS, claiming that after venture capital firm Andreessen Horowitz opposed the original ai16z brand, the migration process diluted the rights of existing holders.

Walters said on social media that the project lacked the financial resources to continue the legal battle, so a settlement was reached by handing over the remaining treasury. He also denied the claim that he personally benefited from it, saying that he had never sold his AI16z positions and only received a moderate salary comparable to other engineers on the team.

Eliza token support terminated

While confirming the foundation's closure, Walters said token holders should not expect buybacks, treasury support or any mechanism designed to support token prices. He wrote that the token was "dead" and described it as "completely hopeless," adding that he no longer holds any tokens and will not support the asset in the future. Walters advised holders to either sell the tokens or manage them themselves because, in his view, there is no longer a foundation to provide financial support.

His post also blamed the culture of speculative trading and continued criticism from parts of the crypto community on his decision to abandon token-related projects. Walters believes that most of the criticism comes from investors who are reluctant to accept losses from speculative trading, rather than people who are interested in the technology itself. According to the statement, he has ruled out the possibility of launching another token related to Eliza and said any future work around the project will remain independent of crypto assets.

ElizaOS development will continue without tokens

Despite the termination of support for tokens, Walters said development of ElizaOS itself will continue. He said his long-term focus remains on building open source AI agent software that allows users to better control their data and supports locally running AI agents with encryption capabilities. He added that even if another open source project eventually surpasses Eliza, Eliza will continue to build independently, and the team will contribute to the open source project that most promotes technology development.

These remarks are consistent with the project's earlier clear direction. In January 2025, ElizaOS released a technical white paper describing the platform as an open source operating system for AI agents that can interact with blockchain networks, smart contracts and decentralized applications. The white paper points out that the framework adopts a modular architecture, including runtime, adapters, roles, clients and plug-in systems, allowing developers to customize AI agents without modifying the core software. The white paper also outlines support for ecosystems such as Solana, Ethereum and TON, as well as integration with AI models such as OpenAI, Llama and Qwen. The roadmap at the time also included a hierarchical task network, a planning system designed to help AI agents break down complex goals into smaller executable tasks.

The Eliza project has transformed since its launch

The project was originally launched on Solana in October 2024 under the name ai16z. It claims to be a decentralized autonomous organization and venture capital-style investment fund managed by AI, with autonomous AI agents assisting in guiding investment decisions and governance. In early 2025, the project was expanded to ElizaOS in a rebranding process, repositioning it as a platform for creating, deploying and managing AI agents, rather than an investment tool focused on a single AI management. According to project documents released during the transition period, the migration also increased the supply of tokens from 6.6 billion to 11 billion, and the circulation supply to approximately 7.4 billion. Developers say the expanded platform will allow AI agents to be created, tokenized and deployed into different use cases, while continuing to develop the underlying open source framework.

Although the foundation is being disbanded, Walters said engineering work will continue. In his post, he described artificial intelligence development as more constructive than the current encryption environment and said the team would continue to build Eliza every day without returning to the foundation backed token model.