Lawsuit Accuses AI16Z, ELIZAOS Creators of Token Fraud

Burwick Law filed a federal class-action complaint in the Southern District of New York on April 21, 2026 (Case No. 1:26-cv-3238), representing investors who bought the token between its October 24, 2024 launch and the filing date. The complaint accuses the creators of AI16Z and its successor ELIZAOS of marketing a fake AI-driven crypto project, misrepresenting ties to Andreessen Horowitz and diverting proceeds to insiders.

The suit says AI16Z launched on the Solana blockchain with a website, developer documentation, GitHub repositories and an AI agent presented as Marc Andreessen. After a social media mention, the token’s market capitalization rose from about $80 million to more than $2.6 billion by January 2025, the filing states.

Plaintiffs allege the core technology did not exist as represented. The complaint asserts the AI component billed as an autonomous investment system was actually operated manually, the open-source framework produced no revenue and the project generated no income during the period described in the suit. The token reached an all-time high of $2.48 on Jan. 2, 2025 and was trading at about $0.00055 at the time of filing, down roughly 99.9 percent from its peak and up about 9 percent in the prior 24 hours.

The filing cites on-chain transactions that it says show insiders sold large amounts at the top. The complaint lists wallet sales of approximately $2.52 million, $2.49 million and $4.77 million, and alleges one trader realized about $39 million in profit on Jan. 11, 2025. It also alleges at least 3,945 wallet addresses suffered losses tied to the token’s collapse.

After Andreessen Horowitz demanded the defendants stop using the a16z name, the complaint says the operators rebranded as ELIZAOS and executed a token migration. Plaintiffs allege the migration allocated nearly 40 percent of the new token supply to insiders, including undisclosed private investors and team members.

The filing notes regulatory and exchange responses that followed. South Korean exchanges operating under the DAXA framework flagged the token with trading warnings, and Coinbase suspended perpetual contract trading linked to the asset.

The complaint brings consumer protection claims under New York and California deceptive practices and false advertising statutes. Plaintiffs seek damages and equitable relief on behalf of purchasers who acquired the token between Oct. 24, 2024 and the filing date. Burwick Law posted on social media that it had filed the federal class action in SDNY on behalf of its client.

The case will proceed in federal court as the parties prepare for discovery and further motions. At the time of the filing, Bitcoin traded above $78,000 and AI-linked cryptocurrencies had a combined market capitalization of about $18.3 billion.