AI16Z and ELIZAOS founders hit with SDNY federal class action over alleged misrepresentations

Crypto-focused law firm Burwick Law has filed a federal class action in the U.S. District Court for the Southern District of New York (SDNY) against Walters and other defendants tied to the AI16Z and ELIZAOS project, alleging consumer protection violations, false advertising and unjust enrichment, according to ME News. The filing says the defendants allegedly traded on the reputation of Andreessen Horowitz (a16z) to market the project. It also states that an AI16Z token was issued on Solana on Oct. 24, 2024, and later rebranded as ELIZAOS. Plaintiffs claim the project promoted itself as offering autonomous AI agents capable of self-directed investing, while actual operations were manually run. The complaint further alleges the project generated no revenue during the period covered by the litigation. The token reportedly peaked at about $2.47 on Jan. 2, 2025, with market capitalization above $2.6 billion, before sliding after large-scale selloffs by major holders. On-chain data cited in the report shows the most profitable traders booked roughly $39 million in gains. (Source: ChainCatcher)