Is Patricia a Scam?

In the emerging crypto space, where innovation and disruptive technology outpace regulation, concerns loom over the prevalence of scams. Ponzi schemes, phishing attacks, hacks, and rug pulls are common in the crypto industry. In the "Wild West", the need for caution and vigilance cannot be overstated. 

Just recently, Nigerian cryptocurrency exchange Patricia raised concerns about an exit scam. Join BrokersView to explore its dubious practices.

About Patricia

Founded in 2017, Patricia is a cryptocurrency trading platform in Nigeria. Patricia states on its website that it "is an alternative payment solutions company that facilitates the easy use of cryptocurrencies for everyday transactions". It also claims to be the easiest and most trusted place to buy, sell, and use crypto and commits to providing traders with tips and tricks to becoming a crypto guru. Patricia promises 24/7/365 customer support and has launched its own education platform, The Patricia Academy.

According to the exchange, its Patricia Refill app for customers from Nigeria and Ghana allows for the direct use of cryptocurrency to buy gift cards, pay cable bills, purchase data, and local and international airtime. Its official announcement also stated that it offers 2% cash back for every airtime and data recharge.

A timeline - Patricia's suspicious practices

It was widely reported by the crypto media that on August 18, Patricia announced the launch of its Patricia Token (PTK) and the conversion of users' outstanding funds into PTKs without their knowledge. This was blasted by the crypto community, with users suspecting that the Patrica team is preparing to execute an exit scam.

On August 24, in response, Patricia released a whitepaper for its Patricia Token in an attempt to clear up confusion and skepticism. The whitepaper states that PTK is a debt management token and PTK will operate similarly to an IOU (I owe you)  as an acknowledgment by the exchange of its debt to its users. PTK 1:1 peg with the leading stablecoin, USDT. Patricia has promised to pay 1 USDT to holders for each Patricia Token they hold in the future, thus ensuring asset recovery and addressing the impact of the security breach.

In fact, back in April, Patricia appeared to be having withdrawal issues. At the time, users left comments below the exchange's official tweets saying that they were unable to withdraw their funds.

On April 28, Patricia suddenly announced that its new app, Patricia Plus, was available for download. This obviously confused users and those who had downloaded the new app expressed their dissatisfaction and skepticism.

On May 8, Patricia seemed to finally respond to the fact that withdrawals had been pending, giving the reason as a result of congestion on the Bitcoin network. However, rather than appeasing users, this exacerbated their distrust of the exchange.

On May 11, Patricia tweeted an announcement that due to congestion on the Bitcoin blockchain, it has decided to completely migrate all its operations to Patricia Plus and that cryptocurrency trading is not available on the old version app. Patricia also noted that withdrawals will be prohibited until May 15, to allow for a smooth migration process.

However, users reported downloading the new app but not seeing their assets. Although Patricia presented answers to users' questions about assets, quite a few users reported trouble using the new app.

On May 17, Patricia announced that all the features of the new app were live, but users were still reporting that they couldn't make withdrawals.

Immediately after that, the exchange suspended cryptocurrency and fiat withdrawals again on May 18 when it said that its new app would be undergoing maintenance between May 17 and May 29. The comments from users show how helpless and distraught they were, as they didn't want to pay any attention to the so-called new app at all and were even tired of Patricia's updates.

On May 26, the exchange announced that it had suffered a hack, with a reported loss of nearly $2 million, which it claimed compromised only BTC and naira assets, and that all assets of customers and merchants were safe. The exchange announced an internal restructuring and suspension of withdrawals.

Despite Patricia's claims that its team is ensuring the resolution of issues and service restoration, most users have already lost trust in the exchange. Users have taken to the comments section to condemn the exchange, asking to return their funds, with most of them already deciding that the exchange is a scam.

In the wake of the hack, Patricia tweeted from time to time that it is working on the problem and updating its progress to try to appease users. However, users have been complaining that the exchange held their funds.

The innovative solution that Patricia finally announced is the launch of its PTK token. However, users seem to have completely lost trust in the exchange and are skeptical about this solution.

According to the PTK white paper, affected BTC and NGN "will be converted to Patricia Token at their respective trading rates as on 29th April 2023". "Whatever Patricia tokens are in the available balance can be converted to USDT. Customers who have filled out the Asset recovery form would be prioritized for withdrawals once the app relaunches."

Is Patricia Token a potential scam?

Patricia's introduction of PTK has sparked widespread concern among users. A user questioned that Patricia does not have the liquidity to pay its customers but has the liquidity to peg PTK 1:1 to USDT.

In addition, the token is not available on major cryptocurrency data aggregators such as CoinMarketCap and Coingecko.

According to the Patricia Token white paper, Patricia Token is not on-chain. A user considered the unavailability on any of the blockchains as a red flag.

Another user said that the lack of proof of reserves raises doubt that it is likely to be a scam.

Until a user has successfully withdrawn from Patricia, it is reasonable to assume that Patricia is probably perpetrating an exit scam.

Conclusion

Patricia users have been experiencing withdrawal issues since April, Patricia has released a series of dubious statements, and the launch of its PTK has raised questions, these are disturbing signs that the exchange is likely a scam. We strongly advise investors to stay away from the exchange. In the crypto trading world lacking regulatory clarity, crypto investors have to take care to protect their crypto assets and try not to leave them on exchanges.