Fetch.ai's Allegations Against Ocean Protocol
Fetch.ai has initiated a class-action lawsuit against Ocean Protocol in New York, alleging significant token mismanagement concerning the AI Alliance's ASI token. This action, which came to light in late 2025, has raised serious concerns regarding the handling of FET and OCEAN tokens.
The lawsuit details accusations of token market manipulation, breaches of fiduciary duty, and substantial negative impacts on the market value of FET and OCEAN tokens. These allegations threaten the trust and financial stability of the broader decentralized AI ecosystem.
Details of the Legal Dispute
Fetch.ai alleges that Ocean Protocol transferred approximately 700 million OCEAN tokens, which were designated for community benefits, to an entity based in the Cayman Islands. These tokens were subsequently converted into roughly 286 million FET tokens and sold, reportedly causing a significant drop in FET's market price.
Ocean Protocol has denied these allegations, asserting that the lawsuit is based on exaggerated claims found on social media. Nevertheless, the lawsuit has intensified scrutiny on token transactions within blockchain projects. The sharp decline in FET's value has fueled concerns about transparency and market integrity across the decentralized AI landscape, serving as a cautionary tale for similar ecosystems.
Industry Reactions and Statements
Humayun Sheikh, the CEO of Fetch.ai, publicly criticized Ocean Protocol, stating:
"We urge token holders to document any financial losses and prepare for claims. I’ll personally fund class actions against Ocean Protocol, aiming to rectify losses the community suffered."
Bruce Pon, a representative of Ocean Protocol, countered these assertions, arguing that the allegations are speculative. Ben Goertzel expressed disappointment with the situation but reaffirmed his support for decentralized AI initiatives.
Financial Impact and Market Trends
The dispute has had a notable financial impact. As of November 8, 2025, Ocean Protocol (OCEAN) was priced at $0.28. Its trading volume had decreased by 14.71% within the preceding 24 hours, according to CoinMarketCap. The fully diluted market capitalization for OCEAN stood at $394.16 million.
The FET token experienced fluctuations, reflecting heightened market volatility associated with the ongoing dispute. This situation mirrors the impact of past token transparency scandals, such as the EOS legal settlement, where community trust and transparency were central issues.
Research indicates that anticipated regulatory and technological outcomes are now under close scrutiny. Historical trends in decentralized finance (DeFi) demonstrate that legal challenges and community-driven actions often lead to realignments. It is anticipated that closer governance oversight and enhanced transparency practices may emerge to mitigate future risks and foster greater trust in decentralized projects.