Rug Pull or Misunderstanding? FET Community in Uproar Over Ocean Protocol Transfers

Fetch.ai opens class-action lawsuit after Ocean Protocol allegedly moves 270 million FET to exchanges.

Ocean Protocol’s sudden withdrawal from the ASI Alliance has sparked accusations of a major token rug pull. In fact, independent on-chain analytics from Bubblemaps indicate that the project transferred approximately 270 million FET, which is worth an estimated $120 million, to Binance and an OTC provider without notifying either the alliance or FET holders.

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

Ocean Protocol Under Fire

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

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

In response, the FET team took to X to publicly accuse Ocean Protocol of selling off tokens intended for community rewards, while the protocol’s CEO dismissed the claims as “unfounded and baseless rumors” and promised a formal response soon.

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

Ocean Must Provide Answers

Amid these developments, Fetch.ai CEO Humayun Sheikh and the broader FET community are demanding transparency from Ocean Protocol regarding the handling of these assets, specifically questioning the timing of the token conversions before the exit, 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 was founded on principles of collaboration, transparency, and shared accountability. While the situation with Ocean Protocol continues to evolve, our focus remains on protecting FET holders and upholding the integrity of the ecosystem. Challenges like this test the strength of our alliances, but they also reinforce why these principles matter. We are committed to ensuring that transparency prevails, that the community’s trust is respected, and that the foundations we’ve built for a decentralized, collaborative future remain intact. Our expectation is clear: 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 opened class-action claims to help affected FET holders to seek compensation. This move could potentially lead to multi-jurisdictional lawsuits and increased scrutiny of Ocean Protocol’s governance and token management practices.