AI Crypto Startup O.XYZ Faces Allegations of Misrepresentation and Internal Violence: Sources

O.XYZ, a blockchain and AI company, is facing accusations that it is promoting crypto and artificial intelligence services, falsely soliciting its technology inquiries, and using aggressive tactics to suppress dissent within the company.

While founder Ahmed Shadid defended his and the company's actions, he spoke to multiple sources familiar with the company's operations. Decrypt They denied the public's claims that they had overstated the potential of O.XYZ.

O.XYZ positions itself as a community-owned “Super AI” ecosystem. The company says it deploys tens of thousands of open-source models and uses significant GPU computing power, enabling it to run a wide range of tasks.

The company has exaggerated its capabilities by claiming it can connect to 100,000 AI models, run 20 times faster than its competitors and have hardware that isn't available in reality, sources say.

He has been accused of raising questions of transparency and accountability by raising the price of the satellite program and misrepresenting its importation.

As a result of those allegations, the company's recently launched O.XYZ token holders may suffer, sources say.

In a statement sent by email DecryptShadid responded to a list of concerns raised about the company's claims, stressing that O.XZ's promotional language is “forward-looking” and aligned with its development roadmap.

However, the sources we talked to Decrypt They argue against this behavior, citing materials on the XYZ website and investor presentations that describe potential rather than desire.

In June, Shadid stepped down as CEO of Solana-based decentralized infrastructure provider IO.net – the company he founded.

A public statement published by Shadid on his departure from IO has since been published. Canceled. From Twitter (aka X). The IO agreed to a “six-figure severance” to avoid conflicts and distance himself from Shadid, a source familiar with the matter said. Decrypt. At the beginning of this year IO He collected 30 million dollars Series A round from prominent crypto industry investors including Hack VC, Solana Labs, Aptos Labs, Multicoin Capital and Animoca Brands.

Several sources who have worked with Shadid in the past described him as a “smart, capable individual” who managed every moment to assemble a highly experienced team for the job. However, a former employee and investor, who asked not to be named, said they would “never work with Shadid”.

Controversial infrastructure and performance questions

In response to accusations that O.XYZ is overstating its capabilities, Shadid highlighted the company's investments in US-based Cerebras Systems hardware and plans to deploy dedicated AI data centers, saying the infrastructure supports “20x faster” AI processing. He cited the Cerebras WSE-3 chips benchmarks as evidence of the performance jump for O.XYZ.

Shadid has claimed “advanced talks” with Cerebras, but sources have dismissed those claims as “carefully false”.

“There is no internal benchmark that supports the 20x figure,” said one source, who said the company's routing technology could increase latency rather than decrease it.

Misleading Starlink and affiliate claims

O.XYZ introduced itself as powered by SpaceX's Starlink, with Shadid emphasizing the technology's integration into the company's operations.

He also explained that the claim refers to O.XYZ's ongoing infrastructure roadmap, plans for “sea connectivity solutions” and future AI capabilities in space planned for 2026.

However, sources strongly dispute that narrative. Instead, they claim that Starlink is only used for basic internet connectivity in remote areas and plays no role in AI processing.

“There are no satellite designs in the company, and no engineering team capable of developing such capabilities,” said one source. Decrypt. He added that there are no ongoing discussions with SpaceX despite an understanding of marketing materials.

Shaded's responses also pointed to the logos of major organizations such as OpenAI and Neuralink, which were used to represent contributors' backgrounds rather than formal partnerships.

However, the sources said that this practice misleads investors and customers, and pointed out that the contributors asked for their logo to be removed after leaving the company, and the question is said to have not been resolved yet.

Controversy around token launch

The launch of the company's O.XYZ token on October 15 on several “unknown” exchanges was another flashpoint. Although the token is only around the average 23,000 dollars With daily trading volume across all exchanges—about $8.1 million in fully diluted token supply—sources say it's only a matter of time before token holders suffer.

“There is no way to use the token to make API calls to the company's AI, nor does the holder of the token legally have the right to access any of the company's assets,” said one of the sources.

Shadid explained that the “first activation of the liquid pool” occurred during the “experimental phase”, which was “immediately released to the community.”

“After a comprehensive analysis of market conditions, we have made a strategic decision to proceed with the launch rather than effectively advancing our planned token release,” he said.

He added, “This decision was communicated clearly through multiple channels, including Discord and internal communications.” “While the initial activation was unplanned, our decision to maintain the token's availability was deliberate and strategic. We maintain comprehensive documentation of all communications throughout this process, demonstrating our commitment to transparency with our community and stakeholders.

One former employee, who did not want to be named for fear of retaliation, questioned the ethical implications of the disclosure that they were offered financial incentives tied to an undisclosed deal.

Another source said: “Shadid was testing trading algorithms when the crash happened.”

“I was testing my O.CAPITAL market maker Kunt system, and it created a pool on Uniswap, and tokens went live by mistake,” a screenshot of his review shows. Decrypt A message posted to Shaded's general Slack channel for all employees to see. “I can't take it down.”

Confidential copies are also reviewed Decrypt It seems to contradict Shadid's explanation. Sources say the start of the simulation was deliberate and the crew was told different stories – some that it was on purpose, others that it was a “mistake”.

One source said: “The company's public-facing documents are completely out of line with what people believe in transparency and community ownership.” “Ahmed effectively owns all the tokens and can dispose of them at will.”

Allegations of retaliation

Sources say O.XYZ used non-disclosure agreements to suppress dissent. They described a culture of retaliation, including termination after questions about the company's work.

“NDAs are being rigged to silence legitimate concerns,” a source said.

Shadid defended the company's contractor-based employment model and strict confidentiality agreements, practices that are standard in the industry.

Shadid did not address the retaliation allegations directly, but emphasized O.X's commitment to “clear, accurate communication” and “comprehensive documentation” of its strategic goals.

Either way, the lawsuit has prompted several former employees and contributors to seek legal counsel. Sources Decrypt Earlier, his staff said they were looking for more options to shed light on the alleged actions of XYZ.