Law firm launches class action against AI16Z, ELIZAOS operators over fake AI crypto project

A class-action lawsuit filed by Burwick Law alleges the creators of AI16Z/ELIZAOS ran a fraudulent, AI-themed crypto project that misrepresented ties to Andreessen Horowitz and marketed a non-existent autonomous AI product. The token — deployed on Solana and launched Oct. 24, 2024 — skyrocketed to a reported $2.6B valuation by Jan. 2025 before collapsing ~99.9% from its $2.48 ATH. At least 3,945 wallets were harmed, with large insider sales (including individual trades of $2.5m–$4.8m and one $39m profit) preceding the crash. Market responses included trading warnings on South Korean exchanges and Coinbase suspending perpetual trading tied to the token. While Bitcoin recently traded above $78,000 and AI-linked crypto market cap rose ~2% in 24 hours, the lawsuit and alleged insider-driven rug-pull heighten regulatory and reputational risks for AI-themed tokens and could pressure investor appetite in the sector.