Justin Sun backs FTX Debt token ‘FUD’ in possible securities law breach
Justin Sun, founder of exchange Huobi, has named his name for Debt DAO, a project that claims to issue FTX users’ debt as bond tokens FUD on behalf of FTX creditors.on twitter threadthe debt DAO said it has been notified of debts of approximately $100 million by FTX creditors.
The Debt DAO said the initial supply and circulation of bond tokens was 20 million, representing 20% of the notified FTX debt. Each FUD token is worth $1.
After FTX confirms the amount of debt through formal disclosure, Debt DAO will issue additional tokens in proportion to the amount of confirmed debt. These tokens will then be distributed to her FUD holders through an airdrop, he said.
For example, if the amount of debt confirmed by FTX is $60 million, the Debt DAO will issue an additional 40 million FUD tokens in addition to the initial 20 million. As per the Debt DAO rules, users who hold her 1 FUD before the secondary public offering will receive her additional 2 FUD from the airdrop.
Debt DAO said:
“As the most cost-effective and high-priority FTX debt on the network, FUD creditors have the first right to assert claims against FTX debt.”
Indebtedness DAO will issue a contract or notarized proof of indebtedness at the “appropriate time”. The DAO also urged FTX creditors with FTX debt of $10 million or more to contact the DAO for a “debt audit and issuance” to allow the debt to be distributed in the secondary market.
Justin Sun says FUD token benefits everyone
Crypto exchange Huobi Are listed According to Sun, FUD is “the highest quality FTX debt asset.” The exchange will be able to withdraw tokens on February 6th.
According to Huobi, DebtDAO will conduct one-to-one debt buybacks to FUD holders after the airdrop.
TRON founder Justin Sun said the FUD token would “benefit everyone in the crypto world”.According to Sun, bond tokens will provide FTX creditors with a “new level of liquidity” offering and allowing FTX debt to be traded on the open market. he added:
“This is for them [FTX creditors] Assets are better controlled and new investment opportunities open up. ”
Possible Violation of Securities Laws
Prominent Financial Lawyer aka ‘wassielawyer’ on Twitter Said FUD definitely violates securities laws. He called the token “a tranche of securitized garbage debt that may not even exist.”
Wassielawyer argued that this is a securitization, not a debt token.he Added:
“This is a terrible idea on so many levels, and not all debt claims are equivalent and fungible.”
another twitter user equal Huobi’s FUD list on the list of unlicensed Pi tokens last year. Huobi listed the Pi Network’s native token last year, but the network later said the listing was unauthorized.
Meanwhile, the scammers are having an athletic meet. Scammers have started circulating counterfeit FUD tokens on the Ethereum network, according to. pec shieldAdditionally, FUD tokens listed on huobi are only available on the Tron network, Sun. warned.
