Shaw Walters, founder of Eliza Labs, has announced that the project's native token is finished and the Eliza Foundation is winding down after a class-action settlement exhausted its remaining treasury.

In a post on X on Tuesday, Walters stated that the project settled with a group of token holders represented by Burwick Law after concluding it lacked the financial resources to continue litigating the case.

"The token is dead. Completely. The foundation is winding down," Walters wrote. "I am starting over, since I own the IP, and I am never letting a token come close to Eliza again."

Walters confirmed that Eliza will no longer have a native token and will instead focus exclusively on developing the open-source ElizaOS AI agent framework.

The announcement marks the end of one of the cryptocurrency sector's most prominent AI agent projects, a category that ranked among the dominant market narratives of late 2024 and early 2025. Launched on Solana in October 2024 under the name ai16z, the project was pitched as an AI-run decentralized autonomous organization that leveraged the open-source Eliza framework to automate venture capital decisions. The token surged to a market capitalization of approximately $2.5 billion in January 2025 before the project rebranded to ElizaOS after Andreessen Horowitz objected to its use of the ai16z name.

In April, Burwick Law filed a class-action lawsuit against Eliza Labs in the U.S. District Court for the Southern District of New York. The complaint alleged false advertising, deceptive business practices, negligent misrepresentation, and unjust enrichment.

According to the complaint, Walters and Eliza Labs marketed ai16z as the governance token for an autonomous AI-managed venture fund modeled on Andreessen Horowitz, when the project was in fact controlled by insiders. The lawsuit also alleged that the project improperly used the venture firm's branding—which forced the rebrand to ElizaOS—and subsequently expanded the token supply from 1.1 billion to 11 billion during a migration, significantly diluting existing holders.

Walters said the settlement consumed the foundation's remaining treasury and available cash.

"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," he wrote.

The outcome illustrates a recurring vulnerability for token-funded crypto projects, where legal exposure can prove existential when litigation costs outpace available treasury resources.

The lawsuit, combined with the broader culture surrounding speculative crypto tokens, ultimately convinced Walters to abandon tokenization entirely.

"I don't own any tokens. I don't support any of it," he wrote. "I love the technology and I'll come back one day when the culture has grown past this point."

Walters also denied personally profiting from the project, stating that he earned only a modest salary comparable to that of the company's other engineers.

Despite walking away from the token, Walters affirmed that development of ElizaOS will continue as a pure open-source project, a path that removes token-related legal and regulatory exposure but also eliminates the treasury mechanism that many crypto-native projects rely on for sustained funding.

"Gonna keep building no matter what, every single day, and I'm not gonna stop until we live in a world where we each own our own data and we don't have to pay to be smart," Walters wrote. "That's the mission."

Walters says Eliza's future will now be built without a token. He concluded his message with a final declaration: "Eliza is dead. Long live Eliza."