Crypto Partnership Fragility Laid Bare in $120M AI Alliance Settlement

Ocean Protocol Settles Dispute with Fetch.ai for $120 Million

Ocean Protocol and Fetch.ai have resolved their contentious legal battle by agreeing to return $120 million in FET tokens, averting a prolonged courtroom showdown and allowing both projects to refocus on their decentralized AI and Web3 initiatives. The settlement, confirmed by multiple sources, including a Coinpedia report, follows months of public accusations over token management and liquidity practices, which culminated in Fetch.ai CEO Humayun Sheikh threatening legal action. Under the terms, Ocean Protocol will return 286 million FET tokens—worth approximately $120 million at current valuations—to Fetch.ai, with the latter agreeing to drop all pending claims, Cointelegraph reported.

The dispute traces back to the 2024 merger of Ocean Protocol, Fetch.ai, and SingularityNET under the Artificial Superintelligence (ASI) Alliance, a coalition aimed at unifying AI-driven blockchain projects under a shared token framework, Coinpedia reported. Blockchain data from analytics firm Bubblemaps revealed that Ocean Protocol's multisignature wallet converted 661 million OCEAN tokens into 286 million FET, with 160 million FET subsequently transferred to Binance and 109 million to OTC provider GSR Markets, TradingView reported. Sheikh alleged this represented a covert liquidation of FET tokens, destabilizing the market and harming holders. Ocean Protocol denied wrongdoing, calling the claims "unfounded" and attributing FET's 93% price decline since the merger to broader market volatility and liquidity drains from other alliance partners, Cointelegraph reported.

The resolution marks a strategic pivot for both projects. Fetch.ai's CEO emphasized the agreement's focus on "protecting the community," while Ocean Protocol's founder, Bruce Pon, framed the exit from the ASI Alliance as necessary to uphold ethical governance. "Ocean could not remain part of the ASI Alliance in good conscience," Pon stated, vowing to publish a rebuttal to recent allegations, Cointelegraph reported. The settlement also includes a provision where Sheikh will cover legal costs associated with token recovery, expediting the process, according to Coinpedia.

The fallout from the feud had already triggered market instability. FET's price plummeted from a peak of $3.22 to $0.26, with analysts linking the decline to eroding trust in decentralized governance models, a CoinSpot analysis found. Ocean Protocol's departure from the ASI Alliance in October 2025 further deepened uncertainty, though the project has since launched a buyback program and sought relisting on major exchanges to rebuild liquidity, Bitcoin Protocol reported.

With the dispute settled, both parties aim to redirect energy toward innovation. Fetch.ai and Ocean Protocol have signaled renewed collaboration in decentralized AI, though the ASI Alliance's future remains uncertain. The case underscores the fragility of crypto partnerships, where transparency and governance frameworks are critical to maintaining stakeholder confidence, Bitcoin Protocol observed.