FTX News: Is FTX Debt Token (FUD) Legit? Justin Sun And Huobi Running A Scam?

Crypto influencer and lawyer Wassielawyer warns FTX Users’ Debt (FUD) bond token by DebtDAO violates securities laws.

Fake DebtDAO group on Saturday announced issuing bond token FTX Users’ Debt (FUD) on behalf of FTX creditors.

On Sunday, Justin Sun’s crypto exchange Huobi listed the FUD token claiming to benefit the crypto market.

FTX Debt Token (FUD) Violates Securities Laws

Crypto influencer and a lawyer wassielawyer took to Twitter to warn the crypto community that FTX Users’ Debt (FUD) bond token listed by Huobi violates securities laws. He called the token “securitized garbage debt” that probably didn’t even exist and a risk for retail investors.

“So apparently Huobi is listing these ‘FTX debt’ tokens. For the love of Christ this isn’t even a debt token, its a securitization. This is such a terrible idea on so many levels. Also – not all debt claims are equal and fungible.”

FTX under new CEO John Ray III attempts to give back money to creditors through the sale of FTX assets, Japan and Europe subsidiaries, available cash, and other methods to bring FTX back into business again quickly.

However, DebtDAO, founded by senior professionals in the debt market, on Saturday said it aims to improve debt claims in the crypto market and help creditors recover their rights and assets.

On the same day, DebtDAO announced issuing bond token FTX Users’ Debt (FUD) on behalf of FTX creditors. It has an initial supply and circulation of 20 million tokens, with each FUD token valued at $1.

On Sunday, Justin Sun-backed Huobi Global listed the FUD token, sparking a controversy in the crypto market. Tron founder Justin Sun also promoted the listing and even tagged FTX’s official Twitter handle. The tweet reads:

“Huobi Global has listed Users’ Debt Token (FUD). This bond token represents the top quality FTX debt asset and is set to benefit everyone in the crypto world.”

Scammers Distributed Fake Token to Justin Sun

On Monday, PeckShieldAlert detected a counterfeit token $FUD (FTX Users’ Debt) distributed by scammers to Huobi exchange. Scammers pretended to be Huobi exchange to add liquidity and sent millions of $FUD tokens to Justin Sun. Later, Justin Sun warned the community that the original FUD token is only available on the Tron blockchain, not Ethereum.

Interstingly, wassielawyer and other crypto influencers revealed that the original @debtdao is not actually behind these tokens from @debtdaoio. Thus, the FUD token is not a legit debt token that Huobi inexplicably decided to list.

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Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.