Edison Irabor
Will Patricia users finally have access to their funds? This is what Patricia users really want to know. But if Patricia’s latest announcement of a Patricia Token for affected users is anything to go by, users regaining access to their funds appear to still be a long way off.
Patricia plans to record all users’ outstanding bitcoin (BTC) and Naira in Patricia Token. According to Patricia, Patricia Token is its stable value coin backed by the U.S dollar: 1PKT = $1.
In other words, all users’ outstanding BTC and Naira will be converted to Patricia Token (PUSD). Conversion rate is calculated at the rate of these assets on April 29 2023. This is subject to terms and conditions. As soon as the asset form is submitted, users are able to then withdraw their funds: in PUSD.
Little or no transparency here
Though Patricia’s latest move is meant to help it solve the current inability of users to withdraw their funds, the lack of transparency from Patricia’s attempt is obvious.
Undoubtedly, Patricia users who access Patricia Tokens will immediately try to sell them in order to recover their funds. But will this not result in another bank-run scenario? Besides, on which exchange or platform are these users able to exchange their Patricia Tokens for the fiat or crypto equivalent?
Interestingly, Patricia has not provided any further details, at the time of writing. No details on proof of reserve. No details on the blockchain in use. No details of how the stablecoin or Patricia Token works.
Is Patricia Token another FTX’s money-out-of-thin-air FTX Token (FTT)?
If Patricia has lost customers’ funds to hackers, then it means those funds are no longer in its reserve. By introducing a token which Patricia could easily mint out of thin air and then exchange these Patricia Tokens with BTC and Naira assets, it will seem to any reasonable observer that Patricia is not giving any value here but a mere token. Some observers say that this reminds them of the out-of-thin-air token FTT, and the eventual collapse of FTX.
David Hundeyin, popular investigative journalist & filmmaker, described Patricia’s announcement as “Exit scam Pro max”. In his words:
Abubakar Idris Idris, a tech journalist, also reacted to the announcement in a tweet. Contrasting Patricia’s move with that by BuyCoins, Idris faulted Patricia on its failure to provide adequate information about how conversion to Patricia’s “dollar token” works:
Tolu Ogunlesi, former special assistant on digital/new media to former President Muhammadu Buhari smells “something really big” and “really unsettling” cooking in the kitchen:
Mark Essien, founder of Hotels.ng, thinks “it’s over”.
Patricia Token: a poor image maker for the blockchain industry
On 28 May, we reported that Patricia crypto exchange’s suspension of withdrawals after an alleged hacking incident has raised concerns. Though Patricia did not state the date its crypto exchange was hacked, the hack most likely happened in January 2022 and up to $2 million was lost, as reported by TechCabal.
On 2 June, we featured the Nigeria blockchain industry players’ reactions to Patricia crypto exchange breach.
And on 16 June 2023, we also reported that Patricia crypto-exchange hackers have been caught and they were to be arraigned, as announced by Patricia CEO, Hanu Agbodje.
Since then till now, Patricia users have been waiting for withdrawals to resume so they can recover their funds from the crypto exchange. Obviously, going by the reactions from Patricia users and the members of the public so far, no one seems to be impressed with Patricia’s plan to have users convert their BTCs and Naira to a stablecoin they know nothing about.
However the good intentions behind this Patricia’s attempt at helping their users recover their funds, this latest attempt does not appear to be the best route for both the crypto exchange and an industry that is still trying to breathe under the weight of the recent FTX implosion and the money-out-of-thin-air tales that the industry is often associated with, time and again.
Patricia needs to go back to the drawing board.
