Fetch sues Ocean over 263M FET ‘community’ sales

The Artificial Superintelligence Alliance, once hailed as crypto’s flagship AI collaboration, is now unraveling under the weight of internal conflict and competing interests.

Formed to unify Fetch.ai, SingularityNET, and Ocean Protocol into a shared ecosystem, the alliance promised to accelerate decentralized AI development through token and governance alignment.

But what began as a vision of synergy has devolved into public disputes over control, transparency, and token management.

Those tensions have now spilled into the courtroom, with Fetch leading a class action that could test not only the alliance’s future but also the very notion of DAO autonomy.

Why is Fetch taking legal action against Ocean Protocol?

Fetch and three token holders have filed a class action in the Southern District of New York alleging Ocean Protocol and its founders misled the community about the autonomy of OceanDAO.

The complaint, “Fetch Compute, Inc., et al. v. Bruce Pon, et al., case no. 1:25-cv-9210,” was filed Nov. 4, 2025, and names Ocean Protocol Foundation Ltd., Ocean Expeditions Ltd., OceanDAO, and Ocean co-founders Bruce Pon, Trent McConaghy, and Christina Pon as defendants.

Plaintiffs claim that Ocean misrepresented that hundreds of millions of OCEAN “community” tokens would be reserved for DAO rewards, but instead converted and sold those tokens after joining the Artificial Superintelligence Alliance, thereby depressing the value of FET and undermining the DAO’s stated governance model.

According to the complaint, the alleged scheme centered on the status of approximately 700 million OCEAN community tokens.

Plaintiffs claim that those tokens were initially pledged for autonomous, rules-based distribution to contributors via smart contracts as Ocean transitioned to a DAO model, but were subsequently reclassified in practice and removed from community control.

The filing argues that Ocean transferred the OceanDAO assets to a Cayman Islands entity, Ocean Expeditions, in late June, converted OCEAN to FET beginning in early July, liquidated a large portion of the resulting FET on centralized venues, and withdrew from the ASI Alliance in October.

K&L Gates partner Ed Dartley, counsel to Fetch.ai and the plaintiff class, said in a statement shared with CryptoSlate that

He added that the defendants “reaped millions of dollars that should have gone to the community.”

Ocean Protocol Foundation is contesting the claims. In a statement to CryptoSlate, Preston Byrne, Managing Partner of Byrne & Storm, who represents Ocean Protocol Foundation, said:

In a statement shared with CryptoSlate, Dr. Ben Goertzel, CEO of SingularityNET and co-founder of the ASI Alliance, said:

Plaintiffs detail a timeline that tracks the ASI token merger and Ocean’s eventual departure.

According to the filing, plaintiffs assert claims of fraud, civil conspiracy, violations of New York General Business Law, breach of contract, breach of the implied covenant, and promissory estoppel, and they seek class certification, damages, and equitable relief, including rescission and disgorgement.

The complaint frames the case around whether a purportedly decentralized DAO was, in fact, controlled by a small group that could move community assets without the approval of token holders, and whether Ocean’s public materials, blog posts, and “vision” documents created a binding covenant regarding how community tokens would be used.

They allege that Ocean joined the alliance on the basis that community tokens would remain restricted for rewards, whereas the FET and AGIX communities voted to proceed.

Afterward, the complaint states that Ocean created Ocean Expeditions on June 27, 2025, transferred OceanDAO assets to that entity, began converting OCEAN to FET around July 1, 2025, and later exited the ASI Alliance on October 8–9, 2025.

The filing quantifies the flows as more than 661 million OCEAN converted into approximately 286.46 million FET, followed by sales of roughly 263 million FET into the market, equivalent to more than 10 percent of the circulating supply at the time, resulting in price pressure on FET during and after Ocean’s withdrawal.

For readers tracking the on-chain and structural mechanics, the complaint claims Ocean had previously revoked contract control and described OceanDAO as “fully decentralized and autonomous,” with community tokens to be disbursed by smart contract to participants in data farming and other incentive programs.

Plaintiffs argue that these commitments were central to merger-vote approvals and to token holders’ decisions to hold, convert, or acquire tokens during the ASI transition, and that any undisclosed change in control of the community token wallets would be material to market behavior and governance expectations.

The filing also asserts market structure impacts. Plaintiffs allege that converting and then selling community tokens created a persistent overhang, weakening confidence in DAO governance and impairing the alliance’s ability to attract contributors and sustain incentives.

The complaint cites price levels around the exit window and ties the drawdown to Ocean’s actions and announcements, while noting the scale of the tokens at issue in relation to the float.

The theory of harm combines direct token price effects with a loss of the incentive pool that the community expected to fund data and model contributions over time.

For an at-a-glance view of the dispute as pleaded:

The case lands in a period of mounting regulatory and civil scrutiny for token projects that describe themselves as decentralized while maintaining foundation-controlled multisig structures. U.S. agencies and courts have treated DAOs as unincorporated associations when human controllers are identifiable.

Recent matters have focused on who can authorize treasury moves, how proposals are approved, and whether token holder votes are binding in practice. The SDNY forum adds discovery and motion practice that can probe the gap between technical decentralization claims and operational control, especially where a large “community” allocation is alleged to have been spent, converted, or redirected.

Key next steps to watch are an appearance by defense counsel, any motion to dismiss challenging the contract and consumer protection claims, and requests for preliminary relief tied to control of token holdings referenced in the filing.

Plaintiffs also plead for equitable remedies that could affect custodied balances or on-chain addresses if granted. Any parallel governance changes, signer disclosures, escrow arrangements, or return mechanisms announced by the parties would reshape the live controversy even as the litigation proceeds.

Ocean’s response will determine whether this dispute proceeds directly to motions practice or toward a negotiated framework for handling the tokens at issue.

Plaintiffs have framed the case around DAO accountability and the reliance of token holders on the DAO. The defense has framed it as a social media narrative.

The complaint now presents that conflict before a federal judge in New York.