This Nigerian Crypto Exchange Valued At $50 Million Is Raising Suspicions, Here’s Why

Nigerian crypto exchange Patricia has actually raised suspicions following its freshly introduced Patricia Stablecoin identified PTK and its unilateral choice to transform users’ funds to its stablecoin without its users’ authorization.

Patricia’s Dubious Move

In May 2023, the Nigerian exchange Patricia supposedly came down with a hack and supposedly lost near $2 million. During this duration, customers and users dealt with a great deal of troubles accessing to their funds as Patricia froze all withdrawals in its platform and offered a declaration to guarantee its concerned users about the scenario of their funds.

However, Patricia users were still able to withdraw their funds by means of the crypto exchange’s freshly introduced app referred to as Patricia Plus App, however just a couple of withdrawals were processed as the platform might not process all withdrawal demands.

A couple of months after the hack, Patricia revealed the intro of its native token Patricia Token (PTK) on August 18, a stablecoin pegged to the United States dollar, as a way to correct its failure to fulfill user withdrawals. Although linked to the exchange’s problem associating with cash, it likewise looks like the token was introduced for fundraising functions.

However, following the intro of its stablecoin, Patricia has actually unilaterally transformed its users’ funds to its freshly introduced stablecoin without looking for authorization from its users, stimulating speculation about the token’s launch and a possible exit fraud.

The exchange required to X (formerly Twitter) on August 18, 2023, notifying its users that all present exceptional BTC and Naira balances will be taped in Patricia Token.

These actions have actually raised great deals of criticism amongst the crypto neighborhood as some neighborhood members currently flagged these actions as a possible exit fraud by the exchange.

“This is all the pointer you need to confirm that your money is gone. Patricia has just upped the level of fintech scam. Convert users money to worthless testnet tokens – manipulate an initial pump to evoke euphoria, sweep the entire rug and blame it on ‘the market’,” an X (previously Twitter) user on specified August 19, in response to the announcement made by the exchange. 

Another user required to X (previously Twitter) in reaction to the statement calling the relocation an ‘Exit scam Pro max’ and highlighting that users are not going to get back their funds.

So far, regional crypto neighborhood members have actually shown other numerous possible elements of scams towards the intro of the Patricia token (PTK). Some of these were the token being missing from cryptocurrency platforms that supply complicated details about a token such as CoinMarketCap and CoinGecko, and PTK not existing on extensively utilized blockchains that are typically utilized to introduce native tokens.

Other crypto lovers have actually blasted the exchange for not having the ability to supply a proof-of-reserve for its native token. “This seems like a scam before you can say your token is backed by the US dollar. There should be a proof of reserve,” an X (previously Twitter) user stated.

When Did The Hack Happen?

Patricia’s declared hack that led to the exchange losing near $2 million in May 2023, was reported to have in fact taken place in January 2022.

The exchange had actually closed all withdrawals in late May 2023, declaring the exchange experienced a hack that impacted the retail trading application which both Bitcoin BTC and Naira possessions were jeopardized in an e-mail.

Following the statement, information from confidential sources suggested that the hack took place in January 2022. Patricia suspended withdrawals and transfer of crypto possessions to other wallets on its platform however continued to permit deposits.

During this duration, Patricia created a deal to buy its users’ crypto possessions and to compensate them with money in order to manage the scenario. However, this deal was momentary and ultimately pertained to an end in March 2023.

Total market cap is up to $1.069 trillion | Source: Crypto Total Market Cap on Tradingview.com

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