Fetch.ai offers to drop legal action if Ocean Protocol returns disputed FET tokens

Fetch.ai and Ocean Protocol are nearing a resolution to their dispute over $120 million in tokens. Fetch.ai CEO Humayun Sheikh said he will drop all legal claims if Ocean Protocol returns 286 million FET tokens from their past merger.

Sheikh said during a live X talk that he will soon send a legal proposal to Ocean Protocol. Over 5,000 people listened as he explained how he wants to rebuild trust in the Fetch.ai community.

Fetch.ai asks Ocean Protocol to return $120M worth of FET tokens

Fetch.ai CEO Humayun Sheikh stated that he aims to resolve the matter peacefully with Ocean Protocol through open discussions and a written agreement, rather than resorting to court proceedings and incurring significant time and financial costs.

He told listeners that the company prioritized maintaining the trust of thousands of community members who believed in the project’s long-term vision.

Sheikh went ahead and promised Ocean Protocol that his company would drop all legal claims and stop any lawsuits connected to the dispute immediately. But for this to happen, Ocean Protocol has to return the 286 million FET tokens.

To sweeten the deal, the CEO stated that Fetch.ai would cover all legal costs necessary to finalize the agreement. “You can have my letter tomorrow. The offer is simple: give my community back the tokens. I will drop every legal claim.”

He also stated that Fetch.ai aims to repair its relationship with Ocean Protocol and ensure its community feels safe and respected once again. The Sheikh wanted both companies to focus on innovation instead of engaging in public disputes, as each had worked hard to establish a reputation for itself. 

A validator node called GeoStaking has been facilitating communication between the two teams and stated that Ocean Protocol would agree to return the tokens once it receives an official written proposal. Sheikh responded and said the document is in the works and could even be sent by Friday.

The dispute between Fetch.ai and Ocean Protocol began months ago and has only worsened since a joint project called the Artificial Superintelligence Alliance (ASI) failed. The project united Fetch.ai, Ocean Protocol, and SingularityNET to build a stronger AI ecosystem; however, problems emerged immediately after the merger announcement. 

According to reports, the teams disagreed on management, and Sheikh even called out Ocean Protocol for mishandling funds connected to the alliance. He stated that their actions caused the value of Fetch.ai’s ETF token to decline. 

Ocean Protocol denies wrongdoing and blames wider market losses

Ocean Protocol denied any claims of wrongdoing and said it was responsible throughout the merger process. But data from blockchain analytics firm Bubblemaps indicated otherwise. According to the report, a multisignature wallet linked to Ocean Protocol converted around 661 million Ocean tokens into 286 million FET tokens (about $120 million at that time). 

The data also indicated that 160 million of those tokens were sent to Binance and another 109 million to GSR Markets. These massive movements raised a lot of eyebrows in the community, and people started accusing Ocean Protocol of secretly selling the tokens. 

The controversy deepened when Ocean Protocol withdrew from the Artificial Superintelligence Alliance on October 9 without explaining the large transfers. The company’s withdrawal caused the price of the FET token to drop from $3.22 to about $0.26 (an entire 93% drop). As a result, investors and community members blamed Ocean Protocol, but the company denied all allegations. 

Ocean Protocol published a blog post on Thursday, where its founder, Bruce Pon, directly addressed the accusations made by Fetch.ai’s CEO. He stated that Ocean Protocol was not responsible for the decline in the price of the Fet token and attributed it to the broader crypto market and liquidity issues. As per his words, “the 93% drop was due to broader market sentiment and volatility.”

Pon went further and accused both Fetch.ai and SingularityNET of “draining liquidity from the entire community.” He claimed they sold more than $500 million worth of FET tokens, which he said caused panic among investors. 

The founder also defended his company’s decision to leave the ASI alliance. He said Ocean Protocol could not “in good conscience” be part of a project that no longer aligned with its values or financial principles.

Industry analysts suggest that both companies should resolve this issue peacefully to regain investor confidence and refocus on innovation rather than engaging in a fight. 

Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.