Gate News message, April 22 — Burwick Law filed a federal class-action lawsuit on April 21 against the creators of AI16Z and ELIZAOS, alleging that the projects perpetrated a $2.6 billion fraud in the crypto market through fake AI claims and deceptive marketing practices. The complaint, filed in the U.S. District Court for the Southern District of New York (Case 1:26-cv-03238), accuses the defendants of presenting a manufactured association with venture capital firm Andreessen Horowitz and operating a manual system disguised as autonomous AI technology.
AI16Z launched on the Solana blockchain on October 24, 2024, and reached a peak valuation of $2.6 billion by January 2025. The lawsuit alleges that large token holders orchestrated coordinated sell-offs at the peak, with one wallet realizing $39 million in profit while retail investors suffered losses. The token subsequently crashed 99.9%, trading at $0.00055 at press time. According to the complaint, at least 3,945 wallet addresses incurred losses during the collapse. Andreessen Horowitz later demanded the project cease using the a16z name; the defendants responded by rebranding to ELIZAOS and conducting a token migration in which approximately 40% of the new allocation was directed to undisclosed insiders and team members.
The lawsuit alleges violations of U.S. consumer protection laws, including deceptive practices and false advertising statutes in New York and California. Plaintiffs seek damages and equitable relief for investors who purchased tokens between October 24, 2024, and the filing date. Regulatory bodies have also responded: South Korean exchanges flagged the token with a trading warning, and a major CEX suspended perpetual contract trading linked to the project.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
DOJ Launches Compensation Process for OneCoin Fraud Victims, $40M+ in Recovered Assets Available
Gate News message, April 22 — The U.S. Department of Justice has announced the launch of a compensation process for victims of the OneCoin cryptocurrency fraud scheme, with more than $40 million in recovered assets now available for distribution.
The scheme, operated between 2014 and 2019 by Ruja
GateNews2m ago
UK FCA Conducts Coordinated Raids on Illegal P2P Crypto Trading Sites in London
FCA raids eight London sites tied to unregistered P2P crypto trading, issuing cease-and-desist notices. Evidence points to money-laundering and terror-financing probes; no P2P platform is FCA-registered; enforcement signals a tougher AML crackdown.
Abstract: The FCA, with tax authorities and police, conducted surprise raids at eight London sites linked to unregistered peer-to-peer crypto trading, issuing cease-and-desist notices. The operation underpins ongoing money-laundering and terrorist-financing probes. No P2P platform is FCA-registered in the UK. Analysts view the action as a shift from statements to enforcement, signaling potential broader crackdowns under AML and financial-promotion rules for crypto assets, which remain high-risk investments.
GateNews51m ago
North Korean Lazarus Group Deploys Mach-O Man Malware to Steal Crypto Wallet Credentials from macOS Users
Lazarus releases Mach-O Man for macOS to steal keychain data and wallet credentials, targeting crypto executives via ClickFix pop-ups and compromised Telegram meetings.
Abstract: The article reports that the Lazarus-linked Mach-O Man malware targets macOS to exfiltrate keychain data, browser credentials, and login sessions to access cryptocurrency wallets and exchange accounts. Distribution relies on ClickFix social engineering and compromised Telegram accounts directing victims to fake meeting links. The piece ties the operation to the April 20 Kelp DAO hack and identifies TraderTraitor as Lazarus-affiliated, noting rsETH movement across blockchains via LayerZero’s OFT standard.
GateNews2h ago
Ripple CEO Garlinghouse Signals 75% Confidence in Legal Resolution by End of April
Ripple CEO Garlinghouse says there is about a 75% chance of a final resolution by end of April, signaling progress in the long-running case and its broader implications for digital asset regulation.
GateNews3h ago
Privacy Protocol Umbra Shuts Down Frontend to Block Attackers from Laundering Stolen Kelp Funds
Gate News message, April 22 — Privacy protocol Umbra has shut down its frontend website to prevent attackers from using the protocol to transfer stolen funds following recent attacks, including the Kelp protocol breach that resulted in losses exceeding $280 million. Approximately $800,000 in stolen
GateNews6h ago
Justin Sun sues World Liberty Financial, alleging WLFI tokens were wrongfully frozen
According to a report by Bloomberg on April 22, TRON founder Justin Sun has filed a lawsuit in the federal court in California against World Liberty Financial (WLFI). WLFI is a decentralized finance (DeFi) project backed by the son of U.S. President Donald Trump. In a statement released on Wednesday, Justin Sun said he decided to pursue legal action after attempting to resolve the dispute out of court but being refused.
MarketWhisper7h ago
