Huobi monetizes FTX collapse with opaque debt token

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Huobi has announced that it’s listing the ‘FTX User Debt’ (FUD) token issued by the ‘DebtDAO.’ This is despite the lack of many basic details that would help explain its functionality.

Indeed, DebtDAO’s Twitter account is only a few days old, it has no website, and has published only a few tweets.

The project claims that FUD is a ‘bond token’ issued after it was notified of a ‘debt amount’ of $100 million related to the FTX bankruptcy. It issued 20 million tokens against this debt and is encouraging other FTX creditors to reach out so it can help them issue more tokens against their debt.

Read more: Why couldn’t Huobi admit Justin Sun helps run the crypto exchange?

However, it’s unclear whose debt DebtDAO is tokenizing, what that claim represents, and if the token even represents any actual meaningful claim. Nor is it clear why the Justin Sun-led Huobi chose to list this token.

After FTX closed withdrawals, Sun announced that he’d allow its customers to use a number of his coins, including Tron, Bittorrent, Just, Sun, and Huobi Token, to swap and effectively withdraw.

Sun has previously insisted that Huobi had no exposure to FTX during the collapse, but he’s been more reluctant to discuss his personal exposure.

Read more: FTX halts ERC-20, Solana, and Tron withdrawals

Kyle Davies and Zhu Su of bankrupt lender Three Arrows Capital (3AC) have also attempted to find a way to profit from claims on FTX debt. They reportedly tried to raise $25 million in a seed round for their new crypto exchange GTX, which will list a variety of claims related to crypto bankruptcies, including FTX and 3AC.

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