FTX's restructuring team today issued a warning to investors, advising them to be on the lookout for fake tokens that aim to capitalize on the challenges the shuttered cryptocurrency exchange is currently facing.
The organization tweeted, "The FTX Debtors encourage stakeholders to be on guard for scams from businesses alleging to be affiliated with FTX. No debt tokens have been issued by the FTX Debtors.
In this context, "creditors" are the individuals or entities that the company owes money to, while "debtors" often refer to the company itself (like its customers).
FUD, also known as "FTX Users' Debt," is a brand-new coin that was listed on Justin Sun's Huobi market as of February 7 despite the fact that FTX does not specifically mention a token by name.
The token achieved a high of $80.13 on the day of its launch, but only had a 24-hour trading volume of roughly $1.8 million. FUD's value has dropped dramatically since that time, and as of right now. It is only worth $15.73. The token can only be used to trade two stablecoins, Tether (USDT) and USDD, and only on Huobi. Its trading volume for the previous day was less than $250,000.
FTX filed for bankruptcy
FTX filed for bankruptcy on November 11 and Sam Bankman-Fried, the creator of the business, resigned as CEO. The exchange crashed when a bank run on the platform reduced liquidity and prompted the company to admit it did not have one-to-one reserves of customer assets. Bankman-Fried was later arrested and charged with eight financial violations in relation to the demise of FTX.
As billions of dollars have disappeared, officials assert that FTX was fraudulently handled. It is now unknown whether or not former customers will ever again be able to access the money they had on the exchange. Adding insult to injury, scam tools like FUD can now be stealing more money from these clients.
Houbi, a Seychelles-based company founded by Justin Sun, the developer of Tron, cut 20% of its staff early this year, joining other firms like Coinbase, Crypto.com, and Kraken in making severe staff cuts in the face of a brutal bear market.