Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Nigeria’s Patricia cryptocurrency platform aims to clarify its token following misunderstandings.
The introduction of Patricia Token (PTK) by the Nigerian cryptocurrency exchange Patricia was met with skepticism and some doubt from users, who took to social media to question the rationale behind the initiative. In light of this reaction, the crypto exchange has published a white paper aimed at clarifying the intended purpose of the Patricia Token.
The white paper states that the Patricia Token is not classified as a stablecoin but rather as a debt token, issued to customers for the management of their debts. Patricia explained that it will function similarly to an IOU (I owe you) document, acting as a means for the exchange to recognize its obligations to its users, with a promise to compensate holders with 1 USDT for each Patricia Token in the future.
In April 2023, the Nigerian crypto exchange Patricia suspended withdrawals and deposits due to a security breach. However, customers who have been unable to access their funds for months as a result of the breach were not reassured by the announcements. They raised concerns, including how the token is backed and why Patricia converted their assets without obtaining customer consent. A significant question remains regarding when they will regain access to their funds. The PTK white paper does not provide a definitive answer to this inquiry.
Related Posts
Understanding Patricia Token – Our Commitment to You
We remain dedicated to our promise of transparency, our commitment to resolving all outstanding issues, and our aim to innovate better solutions for you. pic.twitter.com/Cq8Rk3mReC— Patricia (@PatriciaSwitch) August 24, 2023
The paper indicates that users whose BTC and naira balances were converted into PTK have the option to redeem it for USDT, which can then be exchanged for other cryptocurrencies or fiat currencies such as naira. All conversions will be based on the asset’s US dollar value as of April 29, 2023. Additionally, the launch of the new Patricia Plus App will grant customers who experienced losses in BTC and naira due to the breach access to PTK tokens that will function as their debt tokens.
Related: Bitcoin gains traction in West Africa with educational drive
In 2016, Bitfinex launched BFX following a hack that resulted in the loss of 119,756 bitcoins (valued at $72 million at that time). Similar to Patricia’s strategy, Bitfinex issued a debt token named BFX to reimburse customers affected by the hack, ultimately repurchasing these tokens from customers.
Magazine: Deposit risk: What do crypto exchanges really do with your money?
