Nigeria: Patricia exchange raises exit scam fears after converting user funds to native token

A Nigerian digital asset trading platform has sparked exit scam fears after it launched a native token and converted all its users’ deposits to “worthless” tokens.

Known as Patricia, the Lagos-based platform was hacked earlier this year, it revealed in May. However, it has yet to disclose details about the hack, including the date, the amount stolen, or whether the incident was reported to the authorities. It then suspended withdrawals, leaving its users in distress.

Three months later, the company has launched a new native token to right the wrongs, complete with a redesign of its mobile app. Beyond using the new token to refund users whose funds were lost in the hack, the platform is forcing the token on other users.

Patricia announced that it’s converting—without user content—all outstanding BTC and naira balances to the PTK token.

How Patricia Plus will interact with your funds. pic.twitter.com/xLutZ92JyD

— Patricia (@PatriciaSwitch) August 18, 2023

PTK is reportedly a stablecoin that’s pegged to Tether, another stablecoin with a shady past. The platform describes it as a “debt instrument that ensures that all customers’ assets remain accounted for and initiates the road to asset recovery.”

The biggest red flag is that PTK will not be issued on-chain.

“Patricia Token is not on-chain, it is an internal token used to represent debt and it would be managed by Patricia. The balance will mirror the dollar value of the converted assets,” the company says in its white paper.

Additionally, the company claims it will gradually release the tokens based on its profitability.

Patricia users are up in arms over the launch of the new token. Many took to social media to call out the project, dismissing the new token as an exit scam.

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" https://t.co/mgsneLFaxR

— 👑S.A.L.A.K.O🕊 (@UnkleAyo) August 19, 2023

African investors have been targeted by digital asset scammers over the years, losing billions of dollars. According to Chainalysis, investment, romance, and giveaway scams were the most popular.

South African scam Africrypt holds the record for the largest scam in the continent. Launched by two brothers—aged 18 and 21—it allegedly made off with $3.6 billion from high-net-worth individuals and celebrities.

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