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 (FET) tokens worth roughly $84 million, has spiraled into on-chain accusations, legal threats, and an unexpected reaction from Binance.
Additionally, the dispute raises questions about governance within the ASI Alliance, leaving holders unsure about the future structure and security of their assets.
Ocean Quits ASI Alliance: What Is Happening?
The ASI Alliance was formed in 2024 to unite three leading AI-focused blockchain projects, Fetch.ai, Ocean Protocol, and SingularityNET, under a single token framework.
The fallout started earlier this month after Ocean announced its complete withdrawal from the ASI Alliance earlier this month.
The foundation said it was resigning all director and membership roles from the Singapore-based Superintelligence Alliance Ltd., marking the end of its collaboration with Fetch.ai and SingularityNET.
While the foundation cited legal constraints preventing it from revealing full details, Ocean hinted at deeper conflicts. “We are, however, constrained from sharing the truth and facts at the moment,” the statement read. “Please stand by while the process works its way through, and as soon as we can share more, we will.”
However, tensions escalated 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 alleged that Ocean minted 719 million OCEAN tokens in 2023, later converting 661 million of them into 286 million FET tokens in July 2025.
He claimed large portions 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 called on Binance and other firms to investigate the transactions.
Blockchain data cited by 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 over 55 million to a GSR-linked address.
Another 13.5 million FET were allegedly transferred to an account funded by ExaGroup, with nearly 200 million remaining tokens later distributed to multiple Gnosis Safe wallets in August.
Sheikh claimed most of those funds have since been sent to Binance.
As the dispute intensified, Binance announced on Wednesday that it would stop supporting Ocean deposits via the Ethereum network starting 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 raised speculation that the platform was responding to risks linked to the disputed tokens.
Sheikh said Binance’s move reflected the exchange “listening” to community concerns about Ocean’s transfers.
Following the exit, Sheikh pledged to personally fund class-action lawsuits in at least three jurisdictions and urged affected FET holders to gather evidence of financial losses.
He also accused Ocean of converting community reward tokens before the departure and demanded public disclosure of wallet signatories linked to the OceanDAO and Ocean Expedition entities.
Ocean Protocol Denies $84M Token Misuse Allegations: Lawsuits Incoming
In a statement posted on X, the foundation affirmed that its treasury “remains intact” and confirmed that the dispute has entered formal arbitration under the ASI merger framework.
Ocean
is working and active. We are refraining from engaging in unfounded claims and harmful rumours that make the situation worse for the entire ASI and Ocean communities. Ocean had earlier suggested waiving confidentiality over the adjudicator's recent findings as a means of…
— Ocean Protocol (@oceanprotocol) October 16, 2025
Ocean also disclosed that it had proposed waiving confidentiality over an adjudicator’s findings to ensure transparency, a move it claims was rejected by Fetch.ai’s CEO, Humayun Sheikh.
“Ocean is working and active,” the statement read. “We are preparing responses to the various unfounded claims and allegations while respecting the ambits of the law.”
Ocean further acknowledged Binance’s sole discretion over OCEAN’s listing and deposits, noting it remains committed to “productive and collaborative cooperation” with the exchange as trading activity and investor scrutiny intensify.
The arbitration marks a key juncture for both sides, with legal outcomes likely to shape the future of token governance and trust within the decentralized AI ecosystem.
FET and OCEAN Prices Plunge as Legal Battle Looms, but What Might Be the Cause of the Breakup?
The controversy has shaken confidence in the once-unified AI coalition. FET’s price dropped nearly 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 over tokenomics and project direction.
Ocean, whose mission centers on building a decentralized data marketplace, sought more autonomy to sustain its vision of user-owned data layers for the AI economy
Fetch.ai, meanwhile, has been focused on developing autonomous AI agents and advancing a broader AGI token ecosystem alongside SingularityNET.
The dispute came to a head over the token merger structure. Under the ASI consolidation plan, OCEAN holders were offered a fixed exchange rate to swap their tokens for FET, which was rebranded as ASI.
This fixed rate, which combined with Fetch.ai’s issuance of new tokens to absorb OCEAN supply, introduced inflationary pressure that hurt both tokens’ market performance.
Ocean’s community, which largely resisted full conversion, viewed the arrangement as unfavorable and contrary to its long-term token value strategy. Roughly 270 million OCEAN tokens across 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 relist OCEAN, thereby pushing to reclaim its independent market presence.
The fallout has now escalated into a legal dispute, with both sides trading accusations of mismanagement and misleading conduct.
What began as an ambitious collaboration to unite decentralized AI projects now stands as a cautionary tale of how conflicting governance models and tokenomics can fracture even the most visionary partnerships.
The post Ocean vs. Fetch.ai Turns Ugly: Inside the $84M ASI Token Scandal Tearing Crypto’s AI Giants Apart appeared first on Cryptonews.
