FET Drops Over 10% as Fetchai Pushes Legal Action Against Ocean Protocol – Crypto News

The conflict between Fetchai and Ocean Protocol, two blockchain projects that once teamed up under the Artificial Superintelligence Alliance, is heating up amid growing concerns that Ocean Protocol quietly dumped over a $100 million worth of FET tokens.

In an X post on Monday, Oct. 20, Fetchai announced that it’s organizing “collective legal action” representing FET holders affected by Ocean Protocol’s alleged conversion and transfer of tokens that Fetchai says resulted in losses for token holders.

Fetchai claims that in July, Ocean Protocol converted 661 million OCEAN tokens into 286 million FET, and later moved most of these tokens to exchanges, resulting in “demonstrable market impact and financial loss to FET holders.”

Data from CoinGecko shows that starting July 22, the price of FET began a mostly steady decline to today’s prices, losing over 70% in value by press time. FET is also down about 13% since Fetchai’s Monday tweet.

‘Voluntary Association’

Ocean Protocol announced its withdrawal from the Superintelligence Alliance Singapore, also known as the ASI Alliance, in an Oct. 9 post on Medium, noting that the group was founded on “voluntary association and collaboration to promote decentralized AI through a token merger.”

The ASI Alliance was originally announced in March 2024, and involved the merger of three AI-focused blockchain projects Fetchai, Ocean Protocol, and SingularityNET, and their native tokens.

While Ocean Protocol didn’t elaborate on the reasoning behind its exit from the ASI Alliance, the post stated that since July 2024, 81% of the OCEAN token supply had been converted into FET, leaving roughly 270 million OCEAN tokens still held across more than 37,000 holders. The post suggests that converting their OCEAN tokens to FET remains at the holders’ discretion.

The following day, in an Oct. 10 post on X, Fetchai founder Humayun Sheikh wrote that Ocean Protocol exited the ASI Alliance “without any prior warning or discussion,” adding that the move has raised “many questions that need to be answered.”

In commentary to The Defiant, Sheikh confirmed that “there has been no private communication from Ocean Protocol apart from what is publicly available.” He also noted the ASI Alliance itself continues to move forward as Ocean Protocol “represented only a small part of the broader vision, our collective mission to build an open, decentralized AI ecosystem remains unchanged.”

Commenting on Ocean’s actions, Sheikh characterized them as a “blatant misrepresentation to both the ASI Alliance and the broader $FET community,” noting that the more the team uncovers, the “clearer it becomes that Ocean’s actions were deliberate and intended to harm the alliance and $FET holders.” He added:

Ocean Protocol’s CEO Bruce Pon dismissed Fetchai’s claims as “unfounded and baseless rumors,” saying in an Oct. 11 X post that his team has already proven them false in ongoing legal proceedings.

“If Fetch and Singularity agree, Ocean is prepared to waive confidentiality on the adjudicator’s recent findings and let the community inspect and decide,” Pon added in the X post.

What On-Chain Data Says

Bubblemaps, a blockchain analytics firm that reviewed the transactions on-chain, detailed in an Oct. 21 X thread that a multisig wallet tied to Ocean Protocol indeed converted 661 million OCEAN into 286 million FET in July.

Between July and August, per Bubblemaps’ research, the Ocean team sent some of the FET to over-the-counter (OTC) trading firm GSR, and split the rest across 30 new wallets. By mid-October, Bubblemaps reports, a total of approximately 270 million FET — including from most of the 30 wallets — had been sent to Binance or the OTC provider.

“We can’t confirm whether the $FET tokens were sold by Ocean Protocol, although such transfers are typically associated with liquidation,” Bubblemaps concluded in the post.

In response, Fetchai’s founder said that he is offering a $250,000 reward for further information on OceanDAO signatories, and their relationship to the Ocean Foundation.

The 661 million OCEAN tokens in question evidently came from the more than 719 million OCEAN tokens that the Ocean Protocol team had earmarked after the ASI merger for “community incentives” and “data farming,” Bubblemaps noted.

The Defiant reached out to Ocean Protocol for comments on the ongoing conflict, but hasn’t heard back by press time.