The FTX and Alameda chapter safety underneath chapter 11 is within the third month with none indicators of compensation quickly. Consequently, a mission dubbed DebtDAO got here up with an initiative to make the FTX collectors once more. By newly-issued FTX Consumer Debt (FUD) tokens, DebtDAO intends to boost capital from the general public to repay the collectors. Initially, DebtDAO created roughly 20 M $FUD tokens and capped the worth at 5 USDT. 

Nonetheless, because of the excessive subscription, the $FUD worth rallied past the sending worth. Consequently, DebtDAO initiated an 18M $FUD token burn to rebalance the tokenomics.

Notably, $FUD has already obtained crypto neighborhood recognition with listings from a number of exchanges together with Huobi World. In keeping with the announcement, DebtDao’s official on-chain destruction will happen on February 7. Throughout the destruction interval, FUD property held by customers, pending orders, and order placement features won’t be affected.

“DebtDAO is actively pursuing itemizing and circulation alternatives with main exchanges. Collectors with FTX debt exceeding $10 million are additionally inspired to contact DebtDAO for a debt audit and issuance, enabling the debt to flow into within the secondary market,” Huobi famous.

Consequently, the underlying worth of $FUD climbed considerably to an $800 million market cap.

Controversy Behind DebtDAO on $FUD token

The FTX collapse created a number of regulatory uncertainty within the crypto market worldwide. World regulators are eager to regulate money influx in direction of crypto companies, with Binance’s non-U.S. entity scheduled to cease USD financial institution transfers. Moreover, UK banking giants are reportedly following an analogous path of blocking money influx to the crypto market.

Following the announcement of $FUD tokens, DebtDAO – a permissionless market for crypto credit score – has claimed the $FUD is a phishing rip-off.