Justin Sun backs FTX Debt token ‘FUD’ in possible securities law breach
Justin Solar, the founding father of change Huobi, has put his title behind Debt DAO, a mission claiming to be issuing FTX customers’ debt as a bond token, FUD, on behalf of FTX collectors. In a Twitter thread, Debt DAO mentioned it has been notified of round $100 million in debt by FTX collectors.
Debt DAO mentioned that the bond token may have an preliminary provide and circulation of 20 million, representing 20% of the notified FTX debt. Every FUD token is valued at $1.
After FTX confirms the debt quantity by way of official disclosure, Debt DAO will subject extra tokens proportional to the confirmed debt quantity. These tokens will then be distributed to FUD holders by way of an airdrop, Debt DAO mentioned.
As an illustration, if the debt quantity confirmed by FTX is $60 million, Debt DAO will subject one other 40 million FUD tokens along with the preliminary 20 million. As per Debt DAO’s guidelines, customers who maintain 1 FUD earlier than the secondary public providing will obtain an extra 2 FUDs from the airdrop.
Debt DAO famous:
“As essentially the most cost-effective and prioritized FTX debt on the community, FUD collectors have the primary proper to claim their claims on FTX debt.”
Debt DAO will subject the contracts or notarized proofs of the debt at an “acceptable time.” The DAO additionally urged FTX collectors with over $10 million in FTX debt to contact the DAO for a “debt audit and issuance” to allow secondary market circulation of the debt.
Justin Solar says the FUD token will profit everybody
Crypto change Huobi listed the FUD token for buying and selling on Feb. 5. In keeping with Solar, FUD is a “fine quality FTX debt asset.” The change will allow withdrawals of the token on Feb. 6.
In keeping with Huobi, DebtDAO will do a 1:1 debt buyback for FUD holders after the airdrop.
Tron founder Justin Solar mentioned the FUD token will “profit everybody within the crypto world.” In keeping with Solar, the bond token will present FTX collectors with a “new stage of liquidity” and allow them to commerce their FTX debt on the open market. He added:
“This offers them [FTX creditors] larger management over their belongings and opens up new alternatives for funding.”
Attainable breach of securities legal guidelines
A notable finance lawyer who goes by ‘wassielawyer’ on Twitter said FUD is unquestionably breaching securities legal guidelines. He referred to as the token “a tranche of securitized rubbish debt that won’t even exist.”
It isn’t a debt token however a securitization, wassielawyer insisted. He added:
“That is such a horrible concept on so many ranges. Additionally – not all debt claims are equal and fungible.”
One other Twitter person equated Huobi’s FUD itemizing to the unauthorized Pi token itemizing final yr. Huobi had listed the native token of the Pi Community final yr, however the community later mentioned the itemizing was unauthorized.
In the meantime, scammers are having a discipline day. Scammers have began circulating counterfeit FUD tokens on the Ethereum community, in line with PeckShield. As well as, huobi-listed FUD tokens are solely obtainable on the Tron community, Solar warned.