Ocean Protocol accused of $120 million token sell-off… Conflict with Fetch.ai escalates

A dispute between Ocean Protocol and Fetch.ai over integration among artificial intelligence (AI) projects has intensified. Fetch.ai CEO Humayun Sheikh alleged that Ocean Protocol improperly disposed of tokens worth $120 million and offered a $250,000 bounty for related information providers.

On the 21st (local time), CEO Sheikh posted on X (formerly Twitter), "I am looking for additional information about the relationships between the signers of the OceanDAO multisig wallet and the Ocean Protocol Foundation," and offered a $250,000 reward. A multisig (multisignature) wallet is a type of cryptocurrency wallet that requires multiple signatures to approve transactions.

The bounty offer followed Sheikh's recent claim that "the Ocean Protocol team unauthorizedly converted about 286 million Fetch.ai (FET) tokens and disposed of roughly $80 million worth." The incident is reported to have occurred during the 2024 process in which Fetch.ai, Ocean Protocol, and SingularityNET formed the ASI Alliance (Artificial Superintelligence Alliance) and introduced an integrated token structure.

Sheikh claimed that Ocean Protocol issued a large number of OCEAN tokens before the merger, converted them to FET, and transferred them to centralized exchanges without disclosing the matter. He called the act "a breach of trust and an obvious misuse," threatened legal action, and requested investigations by Binance, GSR, and ExaGroup.

Blockchain data analytics firm Bubblemaps said an Ocean Protocol-related multisig wallet converted about 661 million OCEAN tokens into 286 million FET, and that around 270 million FET (about $120 million) were transferred to Binance and OTC providers. Of these, about 160 million went to Binance and 109 million to GSR Market.

Bubblemaps pointed out that "the Ocean Protocol team still held large amounts of OCEAN after the merger for 'community incentives' and 'data farming,'" and said "a significant portion of these tokens flowed into the market."

Ocean Protocol has not issued an official explanation after withdrawing from the ASI Alliance on the 9th, and on the 17th said "all allegations are baseless conjecture" and that it is "preparing an official statement."

Meanwhile, amid the fallout from the dispute, Fetch.ai's FET token fell 9% within 24 hours and traded at $0.25. Binance recently suspended deposits for OCEAN tokens but did not disclose any link to the incident.