AI-Blockchain Sector Averts Legal War With $120M Token Truce

The long-standing dispute between Fetch.ai and Ocean Protocol appears to be nearing resolution as both parties agree to return 286 million FET tokens—worth approximately $120 million at the time of the alleged transfer—to the Fetch.ai community. The settlement, announced by Fetch.ai CEO Humayun Sheikh during an X Spaces session, aims to avoid a protracted legal battle and restore trust in the AI-blockchain sector. Sheikh stated that Fetch.ai will drop all legal claims if Ocean Protocol formally returns the tokens, with the process potentially finalized as early as Friday.

The feud, which became one of the most publicized conflicts in the AI and blockchain space, originated from the 2024 merger of the ASI Alliance-a coalition uniting Fetch.ai, Ocean Protocol, and SingularityNET. The alliance sought to integrate decentralized AI infrastructure by aligning their token frameworks, with FET as the central asset. However, tensions escalated in mid-2025 when Fetch.ai accused Ocean Protocol of converting 661 million OCEAN tokens into 286 million FET tokens and transferring a significant portion to centralized exchanges like Binance and GSR Markets. Blockchain analytics platform Bubblemaps reported that 160 million FET tokens were sent to Binance and 109 million to GSR Markets, fueling accusations of misappropriation.

Ocean Protocol has consistently denied wrongdoing, asserting that its treasury actions were transparent and compliant with governance policies. In a blog post, Ocean founder Bruce Pon attributed the FET token's 93% price decline—from a peak of $3.22 in 2024 to around $0.26—to broader market volatility, liquidity issues, and large-scale FET sales by other alliance members. The foundation also accused Fetch.ai and SingularityNET of undermining decentralization principles by rushing the merger and ignoring audit recommendations. Despite these claims, Sheikh reiterated that returning the tokens would allow both sides to "protect the community and move forward" without litigation.

The resolution has significant implications for the AI-blockchain sector, which has faced skepticism over governance and transparency. Fetch.ai's FET token has lost over 93% of its value since the ASI merger, while Ocean's OCEAN token has also dipped, trading at $0.30 after a 4% decline in the last 24 hours. Analysts note that the settlement could stabilize investor confidence, particularly as the crypto market grapples with broader uncertainties. GeoStaking, a validator node that mediated the talks, confirmed Ocean Protocol's willingness to return the tokens once a formal proposal is submitted, with media outlets reporting the parties are set to settle the dispute.

The dispute highlights the challenges of managing decentralized projects, where conflicting governance priorities and liquidity strategies can lead to public rifts. While the ASI Alliance aimed to pioneer decentralized AI infrastructure, its dissolution—following Ocean Protocol's withdrawal in October—underscored the fragility of such collaborations. If the token return is finalized, it could mark a turning point for both projects, enabling them to refocus on innovation rather than legal battles; commentators warned the feud endangers the ASI Alliance.