On-chain analysts discovered that Ocean Protocol splits FET token transfers across dozens of wallets before moving them to Binance and OTC providers.
The conflict between Fetchai and Ocean Protocol, two blockchain projects that once partnered under the Alliance for Artificial Superintelligence, has intensified amid concerns that Ocean Protocol may have secretly released more than $100 million worth of FET tokens.
In an X post on Monday, October 20, Fetchai announced that it is organizing a “class action lawsuit” on behalf of FET holders affected by Ocean Protocol’s alleged conversion and transfer of tokens, alleging that Fetchai has caused losses to token holders.
Fetchai claims that in July, Ocean Protocol converted 661 million OCEAN tokens into 286 million FETs and then moved most of these tokens to exchanges, resulting in “obvious market impact and financial loss to FET holders.”
According to data from CoinGecko, since July 22nd, the price of FET began to fall almost steadily to today’s price, reducing its value by more than 70% by the time of writing. FET is also down about 13% since Fetchai’s tweet on Monday.
“Voluntary organization”
Ocean Protocol announced its withdrawal from the Superintelligence Alliance Singapore, also known as the ASI Alliance, in a post on Medium on October 9, noting that the group was established on the basis of “voluntary association and cooperation to advance decentralized AI through token mergers.”
The ASI Alliance was originally announced in March 2024 and included the merger of three AI-focused blockchain projects Fetchai, Ocean Protocol, and SingularityNET and their native tokens.
Although Ocean Protocol did not elaborate on the reasons behind its departure from the ASI Alliance, the post said that since July 2024, 81% of the OCEAN token supply has been converted to FET, with approximately 270 million OCEAN tokens still held by over 37,000 holders. The post suggests that converting OCEAN tokens to FET is at the discretion of the holder.
The next day, Fetchai founder Humayun Sheikh wrote in an October 10 post on X that Ocean Protocol had left the ASI Alliance “without any prior warning or discussion,” adding that the move raised “many questions that need to be answered.”
In comments to The Defiant, Sheikh acknowledged that “there are no private communications from Ocean Protocol other than what is publicly available.” He also noted that the ASI Alliance itself continues to move forward, as Ocean Protocol “represents just one part of a broader vision, and our collective mission to build an open and decentralized AI ecosystem remains the same.”
Commenting on Ocean’s actions, Sheikh characterized it as a “blatant misrepresentation of both the ASI Alliance and the broader $FET community,” noting that the more the team unravels, “the more it becomes clear that Ocean’s actions are deliberate and intended to harm the Alliance and $FET holders.” He added:
“While they try to hide behind claims that the Ocean Foundation and OceanDAO are separate organizations, there is growing evidence that this distinction is meaningless and that the founders themselves were directly involved.”
Ocean Protocol CEO Bruce Pong dismissed Fetchai’s claims as “unsubstantiated and unsubstantiated rumors,” and said in an Oct. 11 X post that Fetchai’s team has already proven them to be false in ongoing legal proceedings.
“If Fetch and Singularity agree, Ocean is willing to waive confidentiality regarding the jury’s recent findings and let the community examine and decide,” Pong added in the X post.
What on-chain data tells us
Blockchain analytics firm Bubble Maps, which investigated on-chain transactions, detailed in an October 21st X thread that a multisig wallet associated with Ocean Protocol actually converted 661 million OCEAN into 286 million FET in July.
According to Bubblemaps research, between July and August, the Ocean team sent some of its FET to over-the-counter (OTC) trading firm GSR and split the rest among 30 new wallets. Bubblemaps reports that by mid-October, a total of approximately 270 million FETs had been transferred to Binance or OTC providers, including from most of the 30 wallets.
“While we cannot confirm whether $FET tokens were sold by Ocean Protocol, such transfers are typically associated with liquidations,” Bubble Map concludes in the post.
In response, Fetchai’s founders said they were offering a $250,000 reward for further information regarding OceanDAO signatories and their relationship with the Ocean Foundation.
Bubblemap noted that the 661 million OCEAN tokens in question came from the more than 719 million OCEAN tokens that the Ocean Protocol team allocated for “community incentives” and “data farming” after the ASI merger.
Defiant reached out to Ocean Protocol for comment on the ongoing dispute, but did not receive a response as of press time.