On Friday, crypto marketplace Patricia announced the launch of its new retail app – Patrica Plus – and the interesting news that all current outstanding BTC and Naira balances have been converted to its native token – Patricia token. The firm claims that the Patricia token is a stablecoin pegged to the dollar ($1 = 1PTK).
A native token, also known as a native cryptocurrency or native coin, is a type of digital asset that is specifically created and issued by a blockchain platform or network
This new development is coming on the back of the suspension of withdrawals on its app (mobile and web) due to a recent security breach. It stated that Patricia Personal, the retail trading application, was solely affected by this breach and BTC and Naira assets were compromised.
So this new app, Patricia Plus, is replacing the Patricia Personal. However, the conversion of current outstanding BTC and Naira balances to Patricia token is a highly contentious action.
Though the promoters of Patricia might say that these new developments are necessary for the firm to move ahead, they raise a lot of issues.
- Launch of Patricia Token: The launch of a native token following a security breach and loss of funds is a noteworthy move. It could potentially be an attempt by the exchange to recover financially or to create an alternative value for their users. However, launching a new token after a breach might be viewed with suspicion, as customers may question whether the new token is secure or if there are underlying motives behind its creation. Also the token is not available on any of the top crypto aggregators such as CoinMarketCap and Coingecko so there is no way to validate the true value of the token
- Conversion of Balances : Converting customers’ bitcoin and Naira balances into a native token is a highly contentious action. It raises concerns about user autonomy, trust, and the intentions of the exchange. Customers may feel that their rights have been violated as they may not have been consulted before the conversion, thereby leading to potential legal and regulatory issues.
- Loss of Trust: The combination of a security breach, loss of funds, withdrawal restrictions, and the conversion of balances can lead to a significant loss of trust in the exchange. Trust is a fundamental element in the cryptocurrency space, and these actions could drive customers away, impacting the exchange’s reputation and future viability.
- Regulatory Implications: The conversion of customer balances could potentially attract regulatory scrutiny. Regulatory bodies may investigate whether the exchange’s actions comply with relevant laws and regulations, particularly regarding customer protection, transparency, and fair business practices.
It is also not explicit if these new developments will lead to a situation where customers can withdraw their balances. If not, these developments are just new ways to delay access to their funds or possibly the loss of their funds
