AI16Z and ElizaOS creators face federal class action lawsuit, accused of alleged brand misappropriation and market manipulation.

Techub News reports that cryptocurrency law firm Burwick Law has formally filed a federal class action lawsuit in the U.S. District Court for the Southern District of New York against the creators of AI16Z and ElizaOS (defendants including Walters). The plaintiffs accuse the defendants of allegedly violating consumer protection laws, engaging in false advertising, and unjust enrichment. The defendants are accused of misappropriating the brand reputation of the well-known Silicon Valley venture capital firm Andreessen Horowitz (a16z), fabricating the image of an AI technology startup, and issuing a token named AI16Z (later renamed ELIZAOS) on the Solana blockchain on October 24, 2024. The project claimed to possess an AI agent capable of autonomous investment, but it was actually manually operated and generated no revenue during the class action period.

On January 2, 2025, the token's price reached an all-time high of approximately $2.47, with a market capitalization exceeding $2.6 billion, before subsequently crashing due to large holder sell-offs. On-chain data indicates that the most profitable traders realized profits of around $39 million. Furthermore, the defendants expanded the total token supply tenfold during the migration to ELIZAOS and allocated 40% of the new tokens to insiders. Affected by this incident, the Korea Digital Asset Exchange Alliance (DAXA) has added the relevant token to its "Investment Warning" list, and Coinbase has also announced the suspension of its perpetual contract trading. This case is regarded as a significant legal action against regulatory arbitrage practices involving "AI + Meme" concepts.