Patricia insists it will repay customer funds after DLM Trust abruptly ended its partnership with the crypto company.
Nigerian crypto company Patricia has said its plan to repay customer funds will proceed despite the withdrawal of its escrow trustee, DLM Trust. On Tuesday, Patricia announced that it had engaged DLM Trust to handle the repayment of $2 million in customer funds that it lost to a hack. One day after that announcement, the SEC-licensed trust company said it had ended all engagements with Patricia and would not be proceeding with the disbursement of refunds. The company cited “multiple breaches in the terms and conditions of agreement and trust.” According to a person with direct knowledge of the matter, DLM Trust abruptly withdrew from the partnership due to media backlash.
Patricia told TechCabal it was shocked by DLM Trust’s sudden decision to terminate the partnership without prior notice. The crypto company maintained that it observed “all due processes, including fulfilling our financial commitments to consummate the contractual agreement.”
“It is therefore astounding to us that not only have DLM Trustees chosen to renege on our agreement, but that they failed to issue us a notice or extend the basic courtesy of a prior discussion, in stark disregard for the clearly spelled termination clause in our contract. We not only categorically reject this false claim, but we also challenge DLM Trustees to substantiate the allegations,” Patricia said in the statement.
DLM’s about-face comes two days before Patricia’s virtual town hall meeting to discuss the partnership with its customers. This turn of events means that Patricia will have a harder time convincing frustrated customers who want access to their money after the trading platform lost $2 million to a hack last year. Since April, customers have been unable to withdraw funds from the Patricia Plus app which triggered a bank run. Patricia scrambled to control the panic by freezing withdrawals, blocking customers from accessing their assets.
The company’s attempt to salvage the situation was to unilaterally convert its customer assets to tokens, an action it took without users’ consent, which raised legal concerns. While Patricia has held town hall meetings and shared several plans around repaying customers, it has been met with skepticism. More recently, some customers started discussing plans to stage peaceful protests to demand refunds of their withheld funds.
