FTX Cautions of Fake ‘Debt Tokens’ Trading on Exchanges

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Key Takeaways:

  • Troubled crypto exchange FTX has cautioned its creditors to stay away from unlicensed debt tokens.
  • The FTX Debtors warn parties involved to watch out for con artists posing as FTX affiliates.

FTX, a defunct cryptocurrency exchange, has advised its creditors to stay away from unlicensed debt tokens like the Justin Sun-backed FTX User Debt Token (FUD).

The recovery team in charge of the FTX bankruptcy today issued a warning to investors, cautioning them to watch out for fraudulent tokens that seek to profit on the difficulties facing the defunct cryptocurrency exchange.

The team wrote, “The FTX Debtors have not released any debt tokens and any such offerings are unauthorised.” A lot less than its initial listing price of $80.13, the FUD token is currently trading at $15.54.

FUD is a debt token that Debt DAO has released with the promise of issuing the debt of FTX users as a bond token. Approximately 20 million FUD were created at launch, and it is planned to create more tokens as soon as FTX confirms the debt amount.

FTX has been counting its troubles with a never ending list of controversies.

Last month, it was revealed that a strange token called FTX 2.0 had  been created and was being airdropped to wallet addresses belonging to Justin Sun, Binance, and KuCoin, indicating that hackers are targeting the cryptocurrency industry once more.

According to blockchain security firm PeckShield, the unethical actors delivered the tokens to the FTX exchange under the pretence of adding liquidity before airdropping them to other cryptocurrency exchanges.

Officials claim that FTX was fraudulently mishandled, and since billions of dollars have vanished, it is now unknown whether or not former clients will ever again be able to access the money they had on the exchange. Scam tools like FUD might now be stealing even more money from these clients, further aggravating the situation.

Justin Sun, however, had previously supported the listing of FUD on Huobi Global and called it a “high quality FTX debt asset.”

FUD reached a high of $115 after the Huobi listing, forcing the DAO to think about burning around 18 million FUD tokens.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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