The $84 Million ASI Token Controversy: Ocean and Fetch.ai's Turbulent Split

The $84 Million ASI Token Controversy: Ocean and Fetch.ai's Turbulent Split

A serious conflict has erupted between Fetch.ai CEO Humayun Sheikh and the Ocean Protocol Foundation, endangering a significant collaboration in crypto’s AI space - the Artificial Superintelligence (ASI) Alliance. This dispute revolves around approximately 286 million Fetch.ai (FET) tokens valued at about $84 million. It has led to on-chain accusations, legal threats, and a surprising response from Binance. Additionally, the situation has raised concerns regarding governance within the ASI Alliance, leaving token holders anxious about the future of their assets.

What’s Happening: Ocean Exits the ASI Alliance

The ASI Alliance was established in 2024 to combine three prominent AI-focused blockchain projects: Fetch.ai, Ocean Protocol, and SingularityNET, under a unified token framework. The conflict sparked earlier this month when Ocean announced its complete withdrawal from the ASI Alliance.

Ocean Exits ASI Alliance Source:Ocean Protocol/X

The foundation stated that it was resigning from its roles in Singapore-based Superintelligence Alliance Ltd., effectively ending its partnership with Fetch.ai and SingularityNET. Ocean cited legal limitations for not disclosing all details but pointed to underlying tensions. In their statement, they noted, "We are, however, constrained from sharing the truth and facts at the moment. Please stand by while the process works its way through, and as soon as we can share more, we will."

Despite this, Sheikh accused Ocean Protocol of secretly minting and converting millions of tokens prior to the merger.

The Claim: Ocean Protocol Faces “Rug Pull” Allegations

In a detailed post on X, Sheikh accused Ocean of minting 719 million OCEAN tokens in 2023 and then converting 661 million of these into 286 million FET tokens in July 2025. He alleged that substantial amounts of these tokens were moved to centralized exchanges and trading firms, including GSR Markets and ExaGroup, without proper disclosure. Sheikh remarked, "If Ocean as a standalone project did this, it would be classified as a rug pull! (Only my opinion)…"

His claim points to blockchain data indicating that over July 3-14, 2025, more than 76 million FET tokens were transferred to specified wallets, which included 21 million sent to Binance and over 55 million to an address linked to GSR.

In another tweet, Sheikh illustrated market impacts, stating, "Over the past 3 months: @oceanprotocol sold 196M $FET; @Fetch_ai sold 43M $FET; @SingularityNET sold 6M $FET. During this period, the price of #FET $FET dropped by over 50%. Do you think the price drop was caused by the project team dumping?"

Legal Actions and Community Response

Amidst escalating tensions, Sheikh announced plans to personally fund class-action lawsuits in at least three jurisdictions and urged affected FET holders to compile evidence of their financial losses, saying, "If you are or were a holder of $fet and have lost money during this Ocean action, be ready with your evidence."

He also accused Ocean of converting community reward tokens prior to their exit and sought public disclosure of wallet signatories related to the OceanDAO and Ocean Expedition entities.

Ocean Protocol Responds to Allegations of Misusing $84M in Tokens

In a statement on X, Ocean Protocol asserted that its treasury "remains intact" and noted that the dispute is now under formal arbitration within the ASI merger framework. They stated, "Ocean is working and active. We are refraining from engaging in unfounded claims and harmful rumors that make the situation worse for the entire ASI and Ocean communities."

Ocean also mentioned a proposal to waive confidentiality concerning the adjudicator’s findings—a proposal they claimed Fetch.ai's CEO rejected. They emphasized their commitment to maintaining a "productive and collaborative cooperation" with Binance amid growing scrutiny from investors and trading activity.

Market Impact: FET and OCEAN Prices Drop Amid Legal Uncertainty

This controversy has shaken trust in the once-cohesive AI coalition. In just 24 hours, FET’s price fell nearly 10%, trading at $0.2954, while OCEAN dropped to $0.26, having lost over 70% of its value since March.

Market Impact Source:CoinGecko

At the core of this division are significant disagreements over tokenomics and project direction. Ocean, committed to creating a decentralized data marketplace, sought greater autonomy to support its vision of user-owned data layers in the AI economy. Meanwhile, Fetch.ai focused on developing autonomous AI agents and expanding a broader AGI token ecosystem alongside SingularityNET.

The dispute intensified over the ASI consolidation plan which allowed OCEAN holders to exchange tokens for FET. This fixed exchange rate, combined with Fetch.ai's issuance of new tokens, created inflationary pressure that negatively impacted both tokens.

The Ocean community largely rejected the full conversion, viewing the terms as disadvantageous and misaligned with its long-term value strategy. As a result, approximately 270 million OCEAN tokens across 37,000 wallets remain unconverted.

In response, Ocean announced a buyback and burn initiative financed by project profits to restore market confidence and decrease supply. They also called on major exchanges, including Coinbase, Kraken, and Binance US, to relist OCEAN, aiming to re-establish their independent market presence.

This disruption has escalated into a legal struggle, where both parties accuse each other of mismanagement and deceptive practices. What began as an ambitious effort to align decentralized AI projects now serves as a cautionary tale about how differences in governance and tokenomics can fracture ambitious partnerships.

Key Takeaways:

A major feud between Fetch.ai CEO Humayun Sheikh and Ocean Protocol Foundation threatens the ASI Alliance.
The conflict revolves around accusations of token mismanagement involving approximately 286 million Fetch.ai tokens worth $84 million.
Ocean Protocol has announced its exit from the ASI Alliance, citing legal constraints on disclosure.
Sheikh accuses Ocean of secretly minting tokens and converting them without proper transparency.
The ongoing legal battle may significantly impact the governance and trust within the decentralized AI ecosystem.