TL;DR

• Fetch.ai says it will halt all legal claims against Ocean Protocol Foundation if the latter agrees to return 286 million FET tokens allegedly sold during their merger.

• The token conversion is said to involve a multisignature wallet linked to Ocean Protocol converting ~661 million OCEAN tokens into 286 million FET - about $120 million at the time.

• Since the launch of the Artificial Superintelligence Alliance (ASI) in March 2024, FET's price has dropped over 93%, from ~$3.22 to ~$0.26 - though Ocean's founder disputes that this was caused by the token transfers.

• Fetch.ai's CEO offered a $250,000 reward for information identifying the signatories of the OceanDAO multisig wallet, escalating the public dispute.

On a Thursday live X Spaces session, Fetch.ai's CEO Humayun Sheikh made a striking proposal: in exchange for the return of 286 million FET tokens, his firm will drop all pending legal claims against Ocean Protocol and even cover the legal costs involved.

The tone marks a departure from outright litigation: instead of court battles, the goal appears to be a negotiated settlement. The tokens in question stem from transactions during the ASI Alliance era - a project formed by Fetch.ai, Ocean Protocol and SingularityNET to unify their ecosystems.

Reports suggest that a multisig wallet linked to Ocean converted 661 million OCEAN tokens into 286 million FET, valued around $120 million at the time. Of those, approximately 160 million FET moved to Binance and 109 million to GSR Markets.

The dispute has strained relations within the AI-blockchain community and sparked sharp criticism about transparency, governance and token management.

The Token Price Plunge and the Fallout

FET's dramatic fall - more than 90% from its peak - has loomed large over the disagreement. At one point trading near $3.22, it now sits around $0.26, according to blockchain-analytics references.

Fetch.ai links part of that decline to the alleged token transfers made by Ocean Protocol during the ASI Alliance phase. On the other side, Ocean's founder Bruce Pon rejects the claims, attributing the plunge to broader market sentiment and asserting that the token moves were legitimate.

The price decline underscores the broader stakes: when tokens move behind the scenes without clear communication, community trust can evaporate quickly. For many FET holders, the dispute has become emblematic of misaligned incentives and governance risks in DeFi alliances.

What's at Stake for Both Projects

For Fetch.ai, the resolution of this dispute is about more than tokens - it's about restoring credibility. By offering to drop lawsuits in exchange for token returns, they're signalling a willingness to move from headline disputes back toward product development.

For Ocean Protocol, agreeing to the return would mean a significant outflow of value and possibly admitting fault - but continuing the fight risks further reputational damage and community erosion. According to a validator node involved in mediation, Ocean is willing to return the tokens once a formal written proposal is submitted.

There's also a precedent question: if one protocol successfully recovers tokens via private settlement, will others follow? How token transfers and audits get handled in future blockchain mergers may depend on the outcome here.

Possible Paths Forward

At this juncture, two main scenarios seem likely:

1. Settlement and token return: If Ocean Protocol agrees to the formal proposal and returns the tokens under clear lock-up terms, the dispute may close. That could help stabilize FET, ease community concerns and allow both projects to redirect focus.
2. Prolonged dispute and litigation: If negotiations falter, Fetch.ai may proceed with litigation. That could drag on, drain resources, prolong uncertainty and deepen distrust in both communities.

Market watchers note that the final outcome will hinge heavily on the details: how many tokens are returned, whether they're locked or released gradually, and how transparent the process is. The broader market may respond to those terms as a sign of whether token-governance risk is reducing or persisting in Web3 alliances.

Final Thought

This isn't just about token accounting - it's about trust, governance and execution in the world of decentralized alliances. The dispute between Fetch.ai and Ocean Protocol offers a cautionary tale: when value crosses protocols, accountability cannot follow only software logic - it needs real-world process, clarity and communication.

If the settlement holds, it could become a model for how blockchain projects resolve internal disputes quietly and transparently. If not, it may serve as a reminder that token transfers without clear guardrails can undermine even the most promising alliance.