Nigerian cryptocurrency exchange Patricia launched a native token.

Suspicious factors point to a potential exit scam.

Potential repercussions for the Nigerian and African crypto industry.

Despite being overlooked within the global crypto conversation, the Nigerian cryptocurrency industry has slowly thrived. Attracting millions of traders, exchanges, and enthusiasts, the sector has established a firm foothold in the nation’s financial landscape. 

Leading the charge, cryptocurrency exchange Patricia quickly solidified its position as a leader in the region, offering an array of trading and investment services. However, tensions are mounting as the launch of its native token drew concerns among its users and industry enthusiasts.

The PTK Token Launches

On August 18th, 2023, the exchange announced the launch of its native token, PTK, a stablecoin pegged to the US dollar. According to the official release, PTK will serve as the exchange’s official trading currency, while existing users’ assets held in Naira and BTC will be converted to the new token.

Questionable factors surrounding the token launch, such as the absence of transparent documentation and its sudden, unannounced release, have raised skepticism among users and the local crypto community.

Perceptions around the exchange were already tense, exacerbated by a recent data breach that compromised user assets.

Unsettling Events

On May 26, 2023, the exchange revealed that it had fallen victim to a major security breach, resulting in the loss of assets and funds. Patricia disclosed neither the severity of the breach nor how much had been compromised, simply stating that only BTC and naira assets had been affected while other cryptocurrencies remained safe. 

In the official statement, the exchange announced the temporary suspension of withdrawals, a measure intended to facilitate restructuring and the recovery of lost assets. However, users continue to voice grievances, claiming their funds are inaccessible.

Users have begun to suspect that these events may not be isolated. With the launch of the PTK native token, users awoke to find their assets forcibly converted into the newly launched stablecoin, with nothing but reassurances of the token’s legitimacy. 

Users raised concerns about the token’s lack of appearance on any of the major cryptocurrency aggregators, further intensifying doubts about its credibility and raising alarms about the potential of a rug-pull scam.

On the Flipside

Exit scams are often preceded by project founders or teams suddenly disappearing, often along with users’ funds. Patricia’s lack of transparency has amplified fears of such an event.

Research data reveals a staggering $119 million loss attributed solely to exit scams during the initial half of 2023.

Why This Matters

In a realm heavily reliant on trust and transparency, missteps can undermine investors’ faith in the ecosystem. Events such as this hold significant importance in the Nigerian cryptocurrency industry’s trajectory and the broader ecosystem.