Justin Sun, the founder of exchange Huobi, has put his name behind Debt DAO, a project claiming to be issuing FTX users’ debt as a bond token, FUD, on behalf of FTX creditors. In a Twitter thread, Debt DAO said it has been notified of around $100 million in debt by FTX creditors.

Debt DAO said that the bond token will have an initial supply and circulation of 20 million, representing 20% of the notified FTX debt. Each FUD token is valued at $1.

After FTX confirms the debt amount through official disclosure, Debt DAO will issue additional tokens proportional to the confirmed debt amount. These tokens will then be distributed to FUD holders through an airdrop, Debt DAO said.

For instance, if the debt amount confirmed by FTX is $60 million, Debt DAO will issue another 40 million FUD tokens in addition to the initial 20 million. As per Debt DAO’s rules, users who hold 1 FUD before the secondary public offering will receive an additional 2 FUDs from the airdrop.

Debt DAO noted:“As the most cost-effective and prioritized FTX debt on the network, FUD creditors have the first right to assert their claims on FTX debt.”

Debt DAO will issue the contracts or notarized proofs of the debt at an “appropriate time.” The DAO also urged FTX creditors with over $10 million in FTX debt to contact the DAO for a “debt audit and issuance” to enable secondary market circulation of the debt.

Crypto exchange Huobi listed the FUD token for trading on Feb. 5. According to Sun, FUD is a “top quality FTX debt asset.” The exchange will enable withdrawals of the token on Feb. 6.

According to Huobi, DebtDAO will do a 1:1 debt buyback for FUD holders after the airdrop.

Tron founder Justin Sun said the FUD token will “benefit everyone in the crypto world.” According to Sun, the bond token will provide FTX creditors with a “new level of liquidity” and enable them to trade their FTX debt on the open market. He added:“This gives them [FTX creditors] greater control over their assets and opens up new opportunities for investment.”

A notable finance lawyer who goes by ‘wassielawyer’ on Twitter said FUD is definitely breaching securities laws. He called the token “a tranche of securitized garbage debt that may not even exist.”

In addition, huobi-listed FUD tokens are only available on the Tron network, Sun warned.