The firm filed a proposed class action in the Southern District of New York in April, alleging false advertising, deceptive practices, negligent misrepresentation and unjust enrichment. The complaint claimed the project marketed itself as an “autonomous, AI-run venture fund” even though Walters and other insiders controlled it. It also alleged that holders were diluted during the migration from AI16Z to ELIZAOS.
The rebrand followed objections from venture capital firm Andreessen Horowitz, commonly known as a16z, over the original name.
“Their claim was ridiculous, but we didn’t have the capital to legally fight it,” Walters wrote. He added that he once held tokens worth about $25 million in his wallet and watched their value fall toward zero.
CoinDesk has asked Eliza Labs and Burwick Law about the settlement terms, the status of the federal case and what holders received when the original daos.fun vehicle expired.
