Eliza Labs founder sells $25M in ElizaOS tokens as project collapses after lawsuit

Shaw Walters, the founder of Eliza Labs, sold his entire ELIZAOS token holdings after their value cratered to approximately $40,000, a figure that once represented a position worth $25 million. The sale, which Walters said was necessary to cover tax obligations on the original value of the tokens, became a footnote in a much larger collapse that he made official on August 4, 2026. On that date, Walters posted to X declaring the ELIZAOS token dead. Not struggling. Not under review. Dead. What happened to the treasury The immediate cause of the project’s unraveling was a class-action lawsuit settlement that drained the foundation’s treasury to zero. With nothing left in reserve, Walters confirmed there would be no buybacks, no supply reduction programs, and no ongoing foundation support for the token. His advice to remaining holders was straightforward: sell if you want out, because no institutional mechanism exists to support the price from here. The market had largely priced this in before the announcement made it official. ELIZAOS token price collapsed to around $0.00025, a decline of roughly 99% from earlier valuations. Market cap figures fell below $3 million, compared to the pe...