Ocean Protocol's Withdrawal from ASI Alliance Triggers $84M Token Scandal

A high-stakes feud has erupted between Fetch.ai CEO Humayun Sheikh and the Ocean Protocol Foundation over 286 million Fetch.ai tokens worth $84 million, threatening to dismantle the Artificial Superintelligence Alliance. Sheikh accused Ocean of secretly minting and converting tokens before the merger, calling it a "rug pull." The dispute raises questions about governance within the alliance and leaves holders unsure about the future structure and security of their assets.

A high-stakes feud between Fetch.ai CEO Humayun Sheikh and the Ocean Protocol Foundation has escalated into legal threats, on-chain accusations, and a reaction from Binance, all centering on about 286 million Fetch.ai (FET) tokens worth roughly $84 million. The conflict stems from the Artificial Superintelligence (ASI) Alliance, a 2024 merger that combined AI-focused crypto projects Fetch.ai, Ocean Protocol, and SingularityNET under a shared token framework, according to a Cointelegraph report.

On Wednesday, Sheikh alleged that Ocean Protocol minted and transferred millions of OCEAN tokens before the merger, Cointelegraph reported. He said the project later converted them into FET and moved large sums to centralized exchanges and market-making firms without proper disclosure. “If Ocean as a stand-alone project did this, it would be classed as a rug pull,” Sheikh wrote on X, detailing how 719 million OCEAN were minted in 2023, with 661 million swapped for 286 million FET in July 2025. He alleged that portions of these tokens were subsequently moved or liquidated, the report added.

Amid the escalating dispute, crypto exchange Binance announced that it will cease support for Ocean deposits starting next Monday, Oct. 20, the Cointelegraph piece noted. While the exchange said users can still deposit using other supported networks, it said ERC-20 deposits made after Oct. 20 “will not be credited and may lead to asset loss.” Though the exchange did not mention the dispute as the cause for the move, limiting ERC-20 deposits suggests that the exchange is conducting internal risk controls or investigations, as many of the disputed tokens are on Ethereum, the article said.

Sheikh interpreted Binance’s decision to cease support for the tokens as the exchange “listening” to his public calls on X to investigate Ocean Protocol’s token transfers, according to Cointelegraph. 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, the report said. 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, Cointelegraph added.

Ocean Protocol responded on X, denying the allegations outright and describing them as “unfounded claims and harmful rumors,” Cointelegraph reported. In an official statement on X, the company said its treasury was intact and that it had suggested waiving confidentiality over an adjudicator’s findings related to the dispute. Ocean claimed Sheikh refused this proposal. “Ocean is working and active,” the post said. “We are preparing responses to the various unfounded claims and allegations while respecting the ambits of the law.”

The mention of an adjudicator suggests that the conflict has already reached a formal legal arbitration, likely under the merger framework that governed the ASI Alliance’s token conversions, Cointelegraph noted. 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, the article added.

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, as reported in a CryptoNews article.