Justin Solar, the founding father of alternate Huobi, has put his title behind Debt DAO, a challenge claiming to be issuing FTX customers’ debt as a bond token, FUD, on behalf of FTX collectors. In a Twitter thread, Debt DAO stated it has been notified of round $100 million in debt by FTX collectors.
Debt DAO stated 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 problem extra tokens proportional to the confirmed debt quantity. These tokens will then be distributed to FUD holders by way of an airdrop, Debt DAO stated.
For example, if the debt quantity confirmed by FTX is $60 million, Debt DAO will problem 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 a further 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 problem the contracts or notarized proofs of the debt at an “applicable 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 alternate Huobi listed the FUD token for buying and selling on Feb. 5. In line with Solar, FUD is a “high quality FTX debt asset.” The alternate will allow withdrawals of the token on Feb. 6.
In line with Huobi, DebtDAO will do a 1:1 debt buyback for FUD holders after the airdrop.
Tron founder Justin Solar stated the FUD token will “profit everybody within the crypto world.” In line 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 provides them [FTX creditors] higher management over their property 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 certainly breaching securities legal guidelines. He known 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 thought on so many ranges. Additionally – not all debt claims are equal and fungible.”
One other Twitter consumer 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 stated the itemizing was unauthorized.
In the meantime, scammers are having a discipline day. Scammers have began circulating counterfeit FUD tokens on the Ethereum community, based on PeckShield. As well as, huobi-listed FUD tokens are solely obtainable on the Tron community, Solar warned.
