$3,800 for 6.6 million: ai16z Accused of Insider Trading

ElizaOS (formerly ai16z) has seen its market value plummet from a peak of $2.7 billion to nearly zero.

Written by: Maher, Foresight News

The crypto market is in deep bear territory, with ongoing disputes.

On August 16, Shaw, a key figure at ElizaOS (formerly ai16z), accused baoskee, a core member of daos.fun, of selling off large amounts of ai16z using insider information during the project's name change and token migration, with related wallets reportedly profiting around $6.655 million.

Baoskee quickly responded, calling Shaw "completely insane" and launching a series of counter-accusations.

Insider Trading During the Name Change Controversy

Baoskee is a core member of the token launch platform daos.fun, and ai16z is merely an Agent project deployed on daos.fun.

Shaw detailed the timeline of events in a tweet. On June 3, 2025, baoskee publicly announced that the Snapshot voting mechanism would "go live this week"; on June 19, baoskee reiterated this promise. The voting mechanism was crucial because a16z had previously insisted on changing the project's name to avoid trademark disputes and potential lawsuits. Shaw pointed out that baoskee had complete control over the execution wallet at that time but claimed that voting had to occur first for the token-holding community to decide on the name change.

Shaw stated that the voting mechanism ultimately did not materialize as promised. After a16z officially contacted and demanded a name change, baoskee sold all ai16z from the daos.fun execution wallet instead. Shaw emphasized that baoskee had access to insider information that other holders did not, placing him in a unique position to avoid legal risks. Since the team could not formally change the name through voting and lacked effective control over the token, the project was forced to undergo a painful and value-destructive migration to elizaOS.

The migration process consumed a lot of time and triggered strong dissatisfaction within the community. Shaw further stated that despite the migration being planned and baoskee being aware, he still dumped his ai16z into the market, causing the price to drop.

According to Shaw's data, baoskee's wallets sold approximately 42.18 million ai16z through multiple transactions, profiting about $6.655 million, while his cost was only around $3,863. Shaw made it clear that he would attach relevant Solscan on-chain records as evidence at the end of the article and added that a16z maintained a very restrained and friendly attitude throughout the process—while the project party put the other side in a passive position, a16z handled the trademark issue in the friendliest manner. Shaw explained that no one anticipated ai16z would become popular so quickly, but once it did, a16z had to actively defend the trademark, or it could lose future protection rights.

In subsequent interactions, Shaw clarified that he was not the founder of daos.fun, but merely "pressed the button for ai16z."

Baoskee Responds: Delete Twitter and Check into a Psychiatric Hospital

Baoskee released a response tweet just hours after Shaw's post. He began by stating, "This industry is full of crazy people," and then directed his attacks at Shaw, almost dismantling each of Shaw's claims.

Baoskee first accused Shaw of previously using the ai16z brand to launch and rug over a dozen projects on pump.fun, and then turning a meme token that originally belonged to the community into a legitimate company, resulting in serious copyright infringement issues. He further pointed out that under Shaw's leadership, this once top AI agent token's market value plummeted from billions to just six figures. Shaw then launched a second token, using the new coin to rug the old one, directly causing significant financial losses for users.

Regarding the controversy over the Snapshot voting, baoskee explicitly countered: the voting mechanism had actually gone live, the website is still accessible, and daos.fun itself had shelled out over $1 million in liquidity for ai16z. He then dug up other past issues involving Shaw, claiming that Shaw had previously sued Elon Musk and Twitter for various ridiculous reasons and even tried to incite Burwick Law to sue them, only to find himself counter-sued using the information he provided. Finally, baoskee accused Shaw of nearly losing tens of millions of dollars in development funds over the past two years while failing to produce any genuinely valuable products.

He concluded by stating that he operates the most honest launchpad on Solana, while Shaw had the audacity to post such a message, suggesting that Shaw delete his Twitter and check into a psychiatric hospital.

$2.7 Billion Market Value, Lawsuit Ends in Near-Zero

To understand this intense conflict, one must return to the development trajectory of ai16z. The project launched on Solana in October 2024, initially positioned as an AI-driven decentralized venture capital-style fund, paired with the Eliza AI agent framework. The project name cleverly played on a16z, quickly becoming a leading asset in that year's AI agent narrative.

According to GMGN data, ai16z's market value briefly surpassed $2.7 billion in early January 2025, making it one of the highest-valued AI-related tokens in the Solana ecosystem at that time.

Trademark issues soon emerged. a16z demanded the project change its name to avoid confusion and legal risks. The project team rebranded to ElizaOS around January 2025, but the token symbol remained ai16z for a while. Subsequently, the team pushed for token migration. Holders could exchange elizaOS at a rate of 1 to 6 for migration, with the new token supporting multiple chains and achieving cross-chain functionality through Chainlink CCIP. After migration, the total supply increased from about 6.6 billion to 11 billion.

Shaw emphasized in his accusations that it was precisely because the voting mechanism failed to materialize effectively as promised that the team was unable to complete the formal name change through community voting, forcing them down a path of value destruction in migration. The migration process itself also triggered dissatisfaction among some holders regarding dilution and governance, leading to subsequent lawsuits against the foundation.

In April this year, the crypto law firm Burwick Law tweeted that it had filed a federal class action lawsuit against AI16Z and the creators of ElizaOS (defendants Walters et al.) in the Southern District of New York (SDNY), accusing them of violating consumer protection laws, false advertising, and unjust enrichment.

Legal documents indicate that the defendants allegedly created a false image of an AI technology startup by misappropriating the brand reputation of the well-known Silicon Valley venture capital firm a16z and issued a token named AI16Z (later renamed ELIZAOS) on the Solana blockchain on October 24, 2024. The project claimed to have AI agents with self-investment funds, but was actually operated manually and had not generated any revenue during the class action.

In early August this year, Shaw publicly announced that the token was "completely dead" and stated that the Eliza Foundation had reached a settlement with former holders in a lawsuit (details not disclosed), with remaining treasury funds used for settlement, and the foundation entered liquidation. Shaw made it clear that he no longer held or supported the token and would continue to focus on the development of the open-source Eliza software, completely withdrawing from the meme coin and token issuance game.

ElizaOS's market value has now fallen back to around $380,000, nearly zero.

Insider Trading Continues Unabated

This public confrontation is essentially a post-mortem settlement regarding governance failures, concentrated control, and information asymmetry.

The highly centralized execution wallet, the promised Snapshot voting failing to take effect, significant non-public information (trademark pressure and migration plans) coinciding with sell-off actions—these are all recurring structural issues in current AI agent and meme narrative projects. Regardless of how the final facts are determined, token holders have borne the consequences of a market value drop from billions to nearly zero.

In February 2026, on-chain detective ZachXBT publicly accused a senior employee of the Solana trading platform Axiom of abusing internal backend privileges to view users' private wallet addresses and track transaction behaviors, allegedly profiting from meme coin trading using this non-public information. The platform subsequently responded that it had initiated an internal investigation. Following this, ZachXBT exposed the LAB token project: insiders controlled over 95% of the supply, creating false hype through paid KOLs and market makers, pushing the valuation to billions, only to unilaterally extend the lock-up period for public sale participants from 3 months to 9 months, while insiders freely sold off, ultimately leading to the token dropping over 99% from its peak, trapping a large number of retail investors.

Those holding key permissions or insider information make moves favorable to themselves and unfavorable to ordinary holders around significant project milestones (name changes, migrations, launches, or peak popularity), only to later find themselves in public confrontations or investigations. Governance opacity, concentrated control, and the disconnect between promises and execution remain persistent issues in the current crypto market.

Ultimately, the cost is often borne by the community.