• FTX is warning creditors against patronizing unauthorized debt tokens, such as the Justin Sun-backed FTX User Debt (FUD) token.
• FUD was listed on Huobi Global with support from Justin Sun, who called it a “top quality FTX debt asset”.
• Following its listing, FUD surged to a high of $115, leading the Debt DAO to consider burning about 18 million FUD tokens.
FTX Cautions Creditors Against Unauthorized Tokens
Bankrupt crypto exchange FTX has warned its creditors against patronizing unauthorized debt tokens, including the Justin Sun-backed FTX User Debt Token (FUD). The tweet came after Huobi Global had listed the token with Sun’s backing and it soared to a high of $115 shortly after.
Justin Sun Backed Listing of FUD
At launch, about 20 million FUD was minted, with plans underway to mint additional tokens as soon as FTX confirmed the debt amount. However, Justin Sun had earlier backed the listing of FUD on Huobi Global claiming that it is a „top quality FTX debt asset“.
FTX Disassociates From Project
Following this news, FTX tweeted on Feb. 17 to disassociate itself from the project and warned creditors against dealing with such unauthorized schemes. The crypto community had also expressed pessimism about the token as the DebtDAO has no website and its Twitter account was last active on Feb. 8th .
Trading Activity Slowed for FUD
Over the last 24 hours trading activities have slowed for FUD as its price fell below $16 and its trading volume sits at $231,300 according to Coinmarketcap data. This might be due to lack of confidence in light of recent events or simply because people are waiting for more information before investing in these tokens again.
Conclusion
In conclusion, it appears that there is still much uncertainty surrounding these unauthorised tokens so it would be wise for investors to exercise caution when considering investing in them until more information comes out regarding their legitimacy and safety measures taken by exchanges like Huobi Global when listing them on their platform.