ChainThink report: Crypto law firm Burwick Law has filed a federal class action lawsuit in the U.S. District Court for the Southern District of New York (SDNY) against AI16Z and creators including Walters, with case number 1:26-cv-03238, alleging violations of consumer protection laws, false advertising, and unjust enrichment.

Legal documents reveal that the defendants misappropriated the brand reputation of the prominent Silicon Valley venture capital firm Andreessen Horowitz (a16z), fabricating an artificial intelligence startup identity and launching the AI16Z token (later rebranded as ELIZAOS) on the Solana blockchain on October 24.

The project claimed to operate autonomous AI agents with proprietary investment capital, but in reality, it was manually operated and generated zero revenue during the pendency of the class action.

On January 2, the token reached a historical high of approximately $2.47, with a market cap exceeding $2.6 billion, before collapsing following large-scale sell-offs by early investors. On-chain data indicates that the most profitable traders realized gains of around $39 million.

Additionally, when migrating the token to ELIZAOS, the defendants increased the total supply by 10x and allocated 40% of the new tokens to insiders.

Currently, the South Korean DAXA exchange member has added the token to its "Trading Alert" list, and Coinbase has suspended perpetual contract trading for the asset.