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Hassan Shittu
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Hassan Shittu
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A high-stakes feud has erupted between Fetch.ai CEO Humayun Sheikh and the Ocean Protocol Foundation, threatening to dismantle one of crypto’s most ambitious AI collaborations, the Artificial Superintelligence (ASI) Alliance.
The conflict, which centers on about 286 million Fetch.ai tokens (FET) worth about $84 million, turned into chain accusations, legal threats, and an unexpected reaction from Binance.
In addition, the dispute raises questions about governance in the ASI Alliance, leaving holders uncertain about the future structure and security of their assets.
Ocean Quit ASI Alliance: What is happening?
U ASI Alliance was formed in 2024 to unite three main AI-focused blockchain projects, Fetch.ai, Ocean Protocol, and SingularityNET, under a single token framework.
The fallout began earlier this month Ocean announced his complete withdrawal from the ASI Alliance earlier this month.
The foundation said it will resign all director and member roles from the Singapore-based Superintelligence Alliance Ltd., marking the end of its partnership with Fetch.ai and SingularityNET.
While the foundation cited legal constraints preventing it from revealing all the details, Ocean hinted at deeper conflicts. “We are, however, limited to sharing the truth and facts at this time,” the statement read. “Please stay while the process works, and as soon as we can share more, we will.”
However, tensions rose when Sheikh accused Ocean Protocol of secretly minting and converting millions of tokens before the merger.
The Accusation: Ocean Protocol Hit with ‘Rug Pull’ Allegations as Fetch.ai CEO Exposes Secret Token Conversions
In a detailed post on X, Sheikh said that Ocean minted 719 million OCEAN tokens in 2023, then converted 661 million of them into 286 million FET tokens in July 2025.
He stated that a large portion of these tokens were transferred to centralized exchanges and trading firms such as GSR Markets and ExaGroup without proper disclosure.
Sheikh described the move as a “rug pull” if done by a stand-alone project and asked Binance and other firms to investigate the transactions.
Blockchain data cited from Sheikh shows that between July 3 and July 14, 2025, more than 76 million FET tokens were moved to specific wallets, including 21 million sent to Binance and more than 55 million to a GSR-linked address.
Another 13.5 million FET were allegedly transferred to an account funded by ExaGroup, with almost 200 million tokens remaining later distributed to several Gnosis Safe wallets in August.
Sheikh stated that most of those funds were sent to Binance.
As the dispute escalated, Binance has announced on Wednesday that will stop supporting Ocean deposits via the Ethereum network from October 20.
The exchange warned users that ERC-20 OCEAN deposits made after that date “will not be credited and may lead to asset loss.”
While Binance did not mention the feud directly, the timing and network restriction has raised speculation that the platform is responding to risks related to the disputed tokens.
Sheikh said Binance’s move reflects the exchange “listen” to community concerns about Ocean transfers.
After exiting, Sheikh promised to personally fund class-action lawsuits in at least three jurisdictions and urged affected FET holders to collect evidence of financial losses.
He also accused Ocean of converting community reward tokens before departure and demanded public disclosure of wallet signatories linked to OceanDAO and Ocean Expedition entities.
Ocean Protocol Denies $84M Token Abuse Allegations: Incoming Proceedings
In a statement published in X, the foundation affirmed that its treasure “remains intact” and confirmed that the dispute has entered formal arbitration under the ASI merger framework.
Ocean also disclosed that he had offered to waive confidentiality on an adjudicator’s results to ensure transparency, a move he says was rejected by Fetch.ai CEO Humayun Sheikh.
“The ocean is working and active,” the statement read. “We are preparing responses to the various unfounded claims and allegations, respecting the scope of the law.”
The ocean also recognized Binance’s sole discretion on the listing and deposits of OCEAN, noting that it remains committed to “productive cooperation and collaboration” with the exchange as trading activity and investor scrutiny intensifies.
The arbitration marks a key juncture for both sides, with the legal outcomes likely to shape the future of token governance and trust in the decentralized AI ecosystem.
FET and OCEAN prices drop as legal battle approaches, but what could be causing the breakout?
The controversy has shaken confidence in the unified AI coalition. The price of FET fell almost 10% in 24 hours, trading at $0.2954, while OCEAN fell to $0.26 after losing more than 70% of its value since March.
Central to the split are fundamental disagreements about tokenomics and the direction of the project.
Ocean, whose mission centers on building a decentralized data market, has sought more autonomy to support its vision of user data layers for the AI ​​economy.
Fetch.ai, meanwhile, has been focused on developing autonomous AI agents and advancing a broader AGI token ecosystem with SingularityNET.
The dispute has come to a head over the token merger structure. Under the ASI consolidation plan, OCEAN holders were offered a fixed exchange rate to exchange their tokens for FET, which was rebranded as ASI.
This fixed fee, which combined with Fetch.ai’s issuance of new tokens to absorb OCEAN’s supply, introduced inflationary pressure that hurt the market performance of both tokens.
The Oceanic community, which has largely resisted full conversion, saw the deal as unfavorable and against its long-term symbolic value strategy. About 270 million OCEAN tokens in 37,000 wallets remain unconverted.
In response, Ocean announced a buyback and burn initiative funded by project profits to restore market confidence and reduce supply. The team also encouraged major exchanges, including Coinbase, Kraken and Binance US, to return OCEAN, thus pushing it to regain its independent market presence.
The fallout has now turned into a legal dispute, with both sides trading accusations of mismanagement and deceptive conduct.
What began as an ambitious collaboration to unite decentralized AI projects is now a cautionary tale of how conflicting governance models and tokenomics can fracture even the most visionary partnerships.
