Patricia crypto exchange in Nigeria clarifies its token amid user confusion

The announcement of Patricia Token (PTK) by Nigerian crypto exchange Patricia was greeted by users with scepticism and some suspicion, as they took to social media to question the motives behind the move.

In response to this reaction, Patricia has released a white paper aiming to shed light on the purpose and function of the Patricia Token.

PTK is a Debt Token, Not a Stablecoin

According to the released white paper, the Patricia token is not a stablecoin but a debt token, issued to customers to manage users’ debt. Patricia said that it will operate similarly to an IOU (I owe you) document, serving as a means for the exchange to acknowledge its debt to its users and promising to pay holders 1 USDT $1.00 for each Patricia Token in the future.

The need for such a token became apparent in April 2023 when Patricia was forced to suspend withdrawals and deposits due to a security breach.

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Customers who found themselves unable to access their funds for an extended period were understandably frustrated. They raised questions regarding the token’s backing and the conversion of their assets without consent.

Most crucially, they sought answers about when they would regain access to their funds. Unfortunately, the PTK whitepaper does not provide a specific timeline for this.

Converting PTK and the Patricia Plus App

According to the whitepaper, users who had their Bitcoin and naira balances converted into PTK now have the option to redeem them for USDT. This USDT can then be exchanged for other cryptocurrencies or fiat currencies like the Nigerian naira.

The conversion rate will be determined based on the assets’ US dollar values as of April 29, 2023. Additionally, Patricia plans to launch the Patricia Plus App, which will grant customers who suffered losses in BTC and naira during the breach access to PTK tokens, effectively serving as a means to reconcile these debts.

This approach isn’t entirely novel. In 2016, Bitfinex faced a similar situation when a hack resulted in the loss of a substantial number of bitcoins.