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Irony: FTX cautions investors from falling victim to token scams

Irony: FTX cautions investors from falling victim to token scams

TL;DR Breakdown

  • Crypto exchange Huobi users are left confused due to a low-volume token, named “FTX Users’ Debt,” being traded on the platform.
  • The restructuring team that oversees FTX’s bankruptcy has warned investors to be aware of any fraudulent tokens that want to capitalize on the exchange’s predicaments.

The restructuring team that oversees FTX’s bankruptcy has cautioned investors to be aware of any fraudulent tokens that want to capitalize on the exchange’s predicaments. “The FTX Debtors urge stakeholders to stay wary for any scams claiming ties with them,” they tweeted. “The FTX Debtors have issued no debt token, and all offers in connection are unauthorized.”

It is essential to know that “debtors” means the company itself, while “creditors” are entities to which the company owes money.

Even though FTX never mentioned a particular token, the warning is believed to be concerning a new cryptocurrency called “FTX Users’ Debt” (or FUD)  that has been listed on Justin Sun’s Huobi exchange since February 7.

On the day it was released, the FUD token achieved a peak of $80.13, and its 24-hour trading volume only generated about $1.8 million. However, its price has since been plummeting. Also, the FUD token is currently trading at $15.73, as reported by CoinMarketCap.

This token can only be exchanged solely on Huobi and against two stablecoins: USDT (US Dollar Tether) and USDD (USD Digital). Notably, within the past 24 hours, the FUD token has generated less than $250,000 in trading volume.

Recall that on November 11, FTX was declared bankrupt, with its creator and CEO, Sam Bankman-Fried stepping down from his role. The platform could not stabilize following a bank run that depleted the company’s liquidity and caused them to admit they did not have one-to-one reserves for customer funds. Subsequently, Bankman-Fried has been charged with eight financial infractions associated with the crumbling of FTX due to these events.

It is alleged that the FTX exchange was handled recklessly, leaving billions of dollars unaccounted for and customers without a clue as to if they will ever be able to access the funds held on the exchange. To make matters worse, dubious tokens like FUD could take away more money from these customers.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

Damilola Lawrence

Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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