Onchain Data Points to Ocean Protocol Wallet Converting OCEAN Tokens to FET Amid Feud

• Alleged Misappropriation: Ocean Protocol is accused of minting and converting 661 million OCEAN tokens into 286 million FET without proper disclosure during the merger.

• Onchain analysis reveals transfers of 270 million FET tokens valued at $120 million to Binance and OTC providers like GSR Markets.

• Market Impact: The dispute has led to a 9% drop in FET price to $0.25, with Binance ceasing OCEAN deposits and legal threats from Fetch.ai.

Ocean Protocol FET token transfer controversy escalates with $250K bounty from Fetch.ai CEO. Discover onchain evidence, merger details, and market effects. Stay informed on AI crypto alliances—read now for expert insights.

What is the Ocean Protocol FET Token Transfer Controversy?

Ocean Protocol FET token transfer controversy stems from claims by Fetch.ai CEO Humayun Sheikh that Ocean Protocol improperly handled tokens during the 2024 merger forming the Artificial Superintelligence Alliance. Sheikh alleges that Ocean Protocol minted millions of OCEAN tokens, converted them to FET, and moved them to exchanges without disclosure, amounting to $80 million in value. This has sparked a public feud, including a $250,000 bounty for information on wallet signatories and threats of class-action lawsuits.

Source: Humayun Sheikh

The dispute intensified when Sheikh pledged support for legal actions across multiple jurisdictions and urged platforms like Binance and GSR to probe the matter. Binance announced it would stop supporting OCEAN token deposits, though it did not cite the controversy as the reason. As of recent trading, FET has declined 9% over the past 24 hours, reaching $0.25, reflecting broader market unease.

FET/USD, 1-month chart. Source: Cointelegraph

Ocean Protocol has firmly denied these accusations, stating it will issue a formal response to address the claims. The foundation withdrew from the ASI Alliance on October 9, 2024, without referencing any token movements at the time.

How Did the Alleged Token Misappropriation Occur in the ASI Alliance Merger?

The alleged misappropriation ties back to the 2024 merger of Fetch.ai, Ocean Protocol, and SingularityNet into the Artificial Superintelligence Alliance, aimed at creating a unified token framework for AI-driven blockchain projects. According to Sheikh’s statements on X, Ocean Protocol maintained a significant portion of OCEAN tokens in team wallets, labeled for community incentives and data farming, even post-merger. Onchain data indicates that approximately 661 million OCEAN tokens were converted into 286 million FET tokens, which were then transferred out.

Blockchain analytics platform Bubblemaps provided detailed insights, showing that an Ocean Protocol-linked multisignature wallet executed these conversions. A multisignature wallet requires multiple approvals for transactions, adding a layer of security but also scrutiny in this case. The data reveals that around 270 million FET tokens, valued at roughly $120 million, were directed to centralized exchanges and over-the-counter providers. Specifically, 160 million FET went to Binance, and 109 million to GSR Markets, an OTC desk.

Source: Bubblemaps

Sheikh highlighted in his X post that this process lacked transparency, potentially undermining the merger’s integrity. Bubblemaps noted in their analysis: “Despite the merger, Ocean Protocol team kept a large amount of $OCEAN in their wallets—supposedly for ‘community incentives’ and ‘data farming.’” Experts in the crypto space emphasize that such undisclosed transfers can erode trust in decentralized alliances, with regulatory implications for token handling in mergers. The FET token’s price volatility, dropping to $0.25 amid the news, underscores the financial stakes involved.

This controversy highlights ongoing challenges in AI-crypto integrations, where token economics must align with community expectations. Onchain transparency tools like Bubblemaps play a crucial role in verifying such claims, as reported by various blockchain analysts.

Frequently Asked Questions

What Triggered the $250,000 Bounty from Fetch.ai CEO Humayun Sheikh?

Humayun Sheikh issued the bounty on October 8, 2024, via X, seeking details on the signatories of OceanDAO’s multisignature wallet and their ties to the Ocean Protocol Foundation. This follows his accusation that Ocean Protocol misappropriated 286 million FET tokens worth $80 million during the ASI merger. The reward aims to uncover evidence of undisclosed token conversions and transfers to exchanges.

Why Did Binance Stop Supporting Ocean Protocol Token Deposits?

Binance announced on October 10, 2024, that it would cease OCEAN token deposits, effective soon after. While the exchange did not explicitly link this to the Fetch.ai-Ocean dispute, the timing aligns with escalating allegations of token mishandling. Users are advised to withdraw OCEAN holdings before the deadline to avoid disruptions in trading activities.

Key Takeaways

• Merger Mismanagement Claims: The ASI Alliance merger exposed potential token handling issues, with 661 million OCEAN converted to 286 million FET without full disclosure, per onchain records.
• Onchain Evidence: Bubblemaps data confirms $120 million in FET transfers to Binance and GSR, raising questions about multisig wallet oversight in crypto foundations.
• Market and Legal Ramifications: FET price fell 9% to $0.25; Sheikh’s legal threats and bounty could lead to investigations and lawsuits, impacting AI token ecosystems.

Conclusion

The Ocean Protocol FET token transfer controversy underscores the complexities of token mergers in the AI-crypto space, with Fetch.ai’s allegations of misappropriation during the 2024 ASI Alliance drawing sharp scrutiny from onchain analysts like Bubblemaps. As Ocean Protocol prepares its response and Sheikh pursues further inquiries, this dispute could reshape trust in decentralized AI projects. Investors should monitor developments closely, as resolutions may influence FET and related token values in the evolving blockchain landscape.