AI agent token collapse: founder declares project dead after $2.4 billion plunge

AI agent token collapse triggers founder’s final warning

Shaw Walters, the mind behind Eliza Labs, announced on Thursday that the ELIZAOS foundation will be dissolved and that investors should liquidate their positions in the AI agent token. The token, once valued at ↓ $2.4 billion, has sunk ↓ 97% since a 2023 lawsuit forced a rebrand from AI16Z.

“We have exhausted every avenue. The project is effectively dead,” Walters told Reuters.

The legal dispute, filed by former partners over alleged misappropriation, triggered a cascade of sell‑offs on major exchanges, eroding market confidence. Bloomberg reported that daily volume fell to under 0.1% of its peak, while price charts show a relentless downward trajectory.

Analysts compare the episode to the broader volatility that has plagued the crypto sector since the pandemic surge, warning that similar token‑centric ventures may face existential risk without robust governance.

Dispatch from: Chloe Winters

Venture Capital & Innovation Reporter