Pulling the carpet or misunderstanding? FET community in turmoil over ocean protocol transfers

Fetch.ai is launching a class action lawsuit after Ocean Protocol reportedly moved 270 million FET to exchanges.

Ocean Protocol’s sudden withdrawal from the ASI Alliance has led to accusations of a major symbolic carpet-pulling. In fact, independent on-chain analysis from Bubblemaps indicates that the project transferred approximately 270 million FET, worth an estimated $120 million, to Binance and an OTC provider without notifying the alliance or FET holders.

Founded in March 2024, the ASI Alliance united Ocean Protocol, Fetch.ai, and SingularityNET under one token, FET, with Ocean Protocol’s OCEAN tokens convertible to FET at a fixed rate.

Ocean protocol under fire

Despite the merger, Ocean Protocol retained a substantial portion of OCEAN in team-controlled wallets reportedly reserved for community incentives and data farming. According to Bubblemaps, on July 1, 2024, such an Ocean Protocol wallet converted 661 million OCEAN converted into 286 million FET, then sent 90 million FET to OTC provider GSR Markets.

By August 31, the remaining 196 million FET had been distributed to 30 new addresses, and by October 14, almost all of these funds had been transferred to Binance or other OTC providers, amounting to an estimated 270 million FET – 160 million to Binance and 109 million to GSR Markets. The transfers coincided with Ocean Protocol’s departure from the ASI Alliance on October 9, which occurred without public explanation or disclosure regarding the redistribution of community tokens.

In response, the FET team turned to

On-chain activity only confirms the token conversions and transfers, which have left open questions about whether liquidation occurred and why such a significant portion of the community’s allocated funds moved without coordination.

Ocean must provide answers

Amid these developments, Humayun Sheikh, CEO of Fetch.ai, and the broader FET community are demanding transparency from Ocean Protocol regarding the handling of these assets, specifically questioning the timing of the pre-exit token conversions, the control structure of the OceanDAO SAFE wallet and Ocean Expedition, and the ultimate disposition of the transferred tokens.

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In an official statement Sheikh said:

“The ASI Alliance is founded on principles of collaboration, transparency and shared responsibility. While the situation with the Ocean Protocol continues to evolve, our focus remains on protecting FET holders and maintaining the integrity of the ecosystem. Challenges like these test the strength of our alliances, but they also reinforce why these principles matter. We want to ensure that transparency prevails, that community trust is respected and that the foundations we have laid for a decentralized, collaborative future remain intact. Our expectation is clear: the ocean must provide answers, and the ecosystem must learn from this moment to emerge stronger and more resilient.”

In line with these concerns, Fetch.ai has done just that opened class action claims to help affected FET holders recover damages. This move could potentially lead to multi-jurisdictional lawsuits and increased scrutiny of Ocean Protocol’s governance and token management practices.