Rug pulling or misunderstanding? FET community in uproar over ocean protocol transfers

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

Ocean Protocol’s sudden withdrawal from the ASI Alliance has sparked accusations of a major symbolic pull. In fact, Bubblemaps’ independent on-chain analysis indicates that the project transferred approximately 270 million FET, with an estimated value of $120 million, to Binance and an OTC provider without notifying either the alliance or the 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 supposedly reserved 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 FETs were distributed to 30 new addresses, and by October 14, almost all of these funds had been transferred to Binance or other OTC providers, which was estimated at 270 million FETs: 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 any explanation or public disclosure regarding the redistribution of community tokens.

In response, the FET team took to

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

The ocean must give 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 token conversions prior to output, the control structure of the OceanDAO SAFE and Ocean Expedition wallet, and the final disposition of the transferred tokens.

You may also be interested in:

In an official statement, Sheikh said:

“The ASI Alliance was founded on principles of collaboration, transparency and shared responsibility. While the situation with Ocean Protocol continues to evolve, our focus remains on protecting FET holders and defending the integrity of the ecosystem. Challenges like this test the strength of our alliances, but also reinforce why these principles are important. We are committed to ensuring that transparency prevails, that trust is respected of the community and that the foundations we have built for a collaborative and decentralized 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 filed class action lawsuits to help affected FET holders seek compensation. This move could potentially lead to multi-jurisdictional lawsuits and increased scrutiny of Ocean Protocol’s governance and token management practices.