Justin Sun, the founder of cryptocurrency exchange Huobi, has supported the launch of the Debt DAO project, which claims to be issuing FTX user debt as a bond token called FUD.
Debt DAO said it has received notification of around $100 million in debt from FTX creditors. Each FUD token has a value of $1 and will have an initial supply and circulation of 20 million.
If the confirmed FTX debt amount is $60 million, Debt DAO will issue an additional 40 million FUD tokens through an airdrop.
Huobi listed the FUD token for trading on Feb 5, and Sun has called the token a “top quality FTX debt asset” that will provide FTX creditors with a new level of liquidity.
However, some finance experts have raised concerns over possible securities law violations. Scammers have also started circulating counterfeit FUD tokens on the Ethereum network.