In the wake of a significant security breach, Patricia, the retail trading app, has announced a rather controversial move. It has converted all outstanding Bitcoin (BTC) and naira balances of its users into its own token, Patricia Token (PTK).
In its announcement on X, Patricia described PTK as a stablecoin backed by the U.S. dollar, with each PTK equal to $1.
But while this approach appears to address concerns about users' access to funds post-breach, it has generated a slew of queries and reservations.
Notably, this conversion was executed without customer consent, sparking concerns about the token's liquidity and usability. As it stands, PTK is not listed on major cryptocurrency aggregators such as CoinMarketCap and Coingecko, making it challenging for users to track its value or engage with it on other platforms.
Also, customers are unable to access these funds. This has been the case since Patricia froze withdrawals for its platform users in May, following its acknowledgement of a breach that occurred in January 2022 and resulted in a loss of $2 million for the company.
It subsequently launched the Patricia Plus app in April 2023, without withdrawal restrictions, which led to a rush of users attempting to move their assets. However, Patricia struggled to meet these sudden liquidity demands.
In an attempt to address this issue, Patricia has resorted to a last resort strategy: the unilateral conversion of its customers' assets into stablecoins. This action, however, has sparked legitimate concerns regarding its legality and ethical implications.
Some experts have also suggested that the move is an "exit scam" strategy leaving users holding worthless tokens unable to convert them to fiat currencies.
As of the time of writing, Patricia did not provide clarifications or responses to these concerns, nor did the company respond to Techloy's email inquiry sent a week ago.
The aftermath of the breach and the subsequent actions taken by the platform have left both Patricia and its users in a precarious position, with the road to resolution remaining uncertain.