Justin Sun Supports FTX Debt Token Despite Possible Securities Law Violation

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.