AI agent token once worth $2.4 billion ends with founder calling it dead

The group filed a proposed class action in the Southern District of New York in April, alleging false advertising, deceptive practices, negligent misrepresentation and unjust enrichment. The complaint claimed the project marketed itself as an “autonomous, AI-run venture fund” even though Walters and other insiders controlled it. It also alleged that holders were diluted during the migration from AI16Z to ELIZAOS.

The rebrand followed objections from venture capital firm Andreessen Horowitz, commonly known as a16z, over the original name.

“Their claim was ridiculous, but we didn't have the capital to legally fight it,” Walters wrote. He added that he once held tokens worth about $25 million in his wallet and watched their value fall toward zero.

CoinDesk has asked Eliza Labs and Burwick Law about the settlement terms, the status of the federal case and what holders received when the original daos.fun vehicle expired. Neither firm replied immediately to the requests.

How AI Agents were once a darling sector

AI16Z launched on Solana in October 2024 with a pitch centered on an AI agent running a venture-style fund, with token holders participating as partners. By late December, its daos.fun vehicle held more than $22 million in user-supplied tokens and was due to expire in October 2025.

The category began with Truth Terminal, an account run by New Zealand researcher Andy Ayrey that posted its own strange, quasi-religious material on X, and drew a $50,000 bitcoin donation from a16z founder Marc Andreessen in July 2024. A developer with no connection to it launched GOAT token around the project that October, and the crypto hit $1.2 billion within days.