The Nigerian cryptocurrency exchange’s announcement of Patricia Token (PTK) met with skepticism and some suspicion from users who took to social media to query Patricia’s motivations.
In response to this reaction, the cryptocurrency exchange company has published a white paper explaining the intended purpose of Patricia Token.
According to the published white paper, Patricia Token is not a stablecoin but a debt token issued to consumers for debt management. Patricia stated that it would function similarly to an IOU (I owe you) document, allowing the exchange to acknowledge its debt to its users and promising to pay 1 Tether for each Patricia Token in the future.
The Nigerian cryptocurrency exchange Patricia suspended withdrawals and deposits in April 2023 due to a security breach. However, the announcements did not appease customers unable to access their funds for months due to the violation.
They inquired about the backing of the token and why Patricia converted them without consumer permission. When they will be able to access their funds is a significant concern. The PTK white paper provides no specific response to this query.
According to the document, users whose Bitcoin and naira balances were converted to PTK can redeem it for USDT, which can then be traded for other cryptocurrencies or fiat currencies.
All conversions will be based on the asset’s value in U.S. dollars on April 29, 2023. With the launch of the new Patricia Plus App, customers who lost BTC and naira due to the breach will have access to PTK tokens, which will function as their debt tokens.
After a breach resulted in a loss of 119,756 BTC (equivalent to $72 million), Bitfinex introduced BFX in 2016. Bitfinex issued a debt token called BFX to compensate customers affected by the breach and eventually repurchased these tokens from affected customers.
