Weeks after converting customers’ assets into its Patricia Token (PTK), Patricia is hoping that its fundraising move will help its repayment plan but frustrated customers aren’t convinced.
Nigeria-focused crypto platform Patricia is attempting to raise new financing several weeks after admitting it lost $2 million worth of customer assets to a cyberattack last year. This represents the Lithuania-based company’s latest move to repay customers.
Last month, Patricia converted the rest of its customers’ assets into a debt management token—the Patricia token. The abrupt arrangement triggered an outcry from customers, forcing the company to issue a detailed explanation of the token. Despite the new token, Patricia admitted that its repayment plan is tied to its profitability as a platform, although it has no timeline for financial sustainability.
With the company’s new fundraising efforts, Patricia is hoping it can raise enough money to repay frustrated customers. [ad]
At a virtual town hall meeting with users Friday, Hanu Fejiro, the company’s CEO, confirmed that Patricia has secured some funding but he didn’t provide further details of the investment. “We have raised money [and] we have been working very hard to get the money back to you. And when we launch the application, the first set of customers will be able to get their money back immediately and in full.”
Two months ago, Seun Dania, founder and CEO of crypto firm TradeFada announced on LinkedIn that he made an investment in Patricia. The value of the investment was undisclosed.
Hanu added that the Patricia Plus app — billed for a relaunch soon — is currently undergoing beta testing. But for frustrated customers, these explanations aren’t satisfactory. Patricia Plus first launched in April and immediately triggered a bank run, as customers raced to withdraw their funds after the company admitted to have lost funds due to the cyberattack. Patricia scrambled to control the panic by freezing withdrawals, effectively blocking customers from accessing their assets.
Patricia’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. The company is hoping that it can successfully use the debt management tokens to repay its customers taking a cue from Bitfinex, a foreign cryptocurrency exchange platform which lost around $72 million to hackers in 2016. Bitfinex offered customers a debt management token, a liability obligation by the company until it repaid them in full.
Although Patricia is looking to do something similar, an atmosphere of mistrust, partly stemming from its delay in disclosing the breach, remains a stumbling block in its efforts to get full buy-in from customers.
“Just let us know when we are getting our money,” one angry customer wrote in the comment section of the virtual town meeting. Another customer suggested in the comments section that the affected customers stage a protest to the authorities. Others are considering taking legal action against the company. “It is simple, just give us a date we will be able to withdraw,” another frustrated customer wrote.
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