The ambitious Artificial Superintelligence Alliance (ASI Alliance), uniting Fetch.ai, SingularityNET, and Ocean Protocol for decentralized AI, is fracturing. What began as a promise of synergy has escalated into a public dispute, culminating in a class-action lawsuit by Fetch.ai against Ocean Protocol. This legal battle in the Southern District of New York threatens not only the alliance but also the very notion of DAO autonomy and transparency in crypto.
Fetch.ai Alleges Misuse of 263M FET 'Community' Tokens
Filed on November 4, 2025, the lawsuit by Fetch.ai and three token holders names Ocean Protocol Foundation, Ocean Expeditions Ltd., OceanDAO, and co-founders as defendants. The complaint alleges Ocean Protocol misrepresented the fate of approximately 700 million OCEAN "community" tokens. These tokens, initially earmarked for autonomous distribution via smart contracts for DAO rewards, were allegedly reclassified and removed from community control.
The lawsuit details a scheme where OceanDAO assets transferred to Ocean Expeditions, a Cayman Islands entity, in late June 2025. Subsequently, from early July 2025, over 661 million OCEAN were reportedly converted into approximately 286.46 million FET. Crucially, around 263 million FET were then allegedly liquidated on centralized exchanges. This mass sale, coinciding with Ocean’s withdrawal from the ASI Alliance in October 2025, is accused of depressing FET's value and undermining DAO governance.
“Ocean misled the token community and its merger partners… to believe that 600 million Ocean tokens were reserved for community rewards,” stated Ed Dartley, counsel to Fetch.ai, asserting that defendants “reaped millions of dollars that should have gone to the community.”
Legal Grounds and Industry-Wide Implications
The lawsuit asserts claims including fraud, civil conspiracy, breach of contract, and promissory estoppel, seeking class certification, damages, and equitable relief. A core contention: was a supposedly decentralized DAO, in fact, controlled by a small group capable of moving significant community assets without token holder approval?
Ocean Protocol Foundation vehemently denies the allegations. Preston Byrne, representing OPF, dismissed the lawsuit as "very strange" and "designed for consumption on social media," promising a vigorous defense. Dr. Ben Goertzel, CEO of SingularityNET and co-founder of the ASI Alliance, expressed disappointment with Ocean's actions but maintained a neutral stance on the legal battle, affirming the Alliance's continued progress.
Dr. Ben Goertzel stated, "While I have been very unpleasantly surprised by some of the recent actions of Ocean Protocol... the Alliance continues to move forward powerfully toward decentralized AGI and superintelligence, with new advances every day."
This high-profile case highlights mounting regulatory and civil scrutiny on projects claiming decentralization while maintaining centralized control. The litigation in the Southern District of New York will critically examine the gap between technical decentralization claims and operational control, especially concerning large community allocations. The outcome could significantly shape future expectations for DAO accountability and transparency across the crypto ecosystem.
Source: CryptoSlate
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