What will you do if you wake one day to find out your assets have been breached?

Patricia, one of Nigeria’s leading crypto market places, has experienced a severe security breech that compromised all its assets in 2022.

Background on Patricia

Patricia is an Africa-centric integrated alternative payment and e-commerce company that facilitates the easy use of digital currencies like Bitcoin, Ethereum and other digital assets for everyday transactions.

Patricia Technologies Limited established her first branch in Lekki, Lagos on August 16, 2017, with a small office set up to serve less than 80 clients. It was founded by Hanu Fejiro Agbodje, who wanted to create a safe & secure platform for users seeking to exchange their Gift cards for cash.

For Patricia, building user-centric products, as well as focusing on practical solutions has been indispensable to her market growth. From the Patricia Luxury Debit Card that lets customers withdraw their Bitcoin in Naira, creating the option to spend your Bitcoin, to the Patricia Refill option that enables users to pay utility bills, fulfil their cable subscriptions, or buy airtime with Bitcoin, to Airtime-to-Cash that saves that distraught user when he/she purchases excess airtime; Down to Hank - a technology that helps you save precious time by finding your missing valuables just at a click of a button. And only recently, the company launched Africa’s first bitcoin ATM card. All thanks to the genius and the creativity of Hanu Aigbodje. It has SwitchPay, WasilaDev, egallera.com as its competitors.

What happened to Patricia?

In 2022, Patricia announced being a victim of a security breach that compromised both its bitcoin and naira assets which made customers unable to withdraw funds from the platform. In an email to customers explaining the decision, the company said it suffered a breach. Part of the email read, “Not long ago, we were victims of a hack. Patricia, the retail trading application, was solely affected by the breach. BTC and Naira assets were compromised. With the help of the law enforcement, Patricia announced that they were to identify an individual among the group who perpetrated the breech.

In October, Nigerian SEC-licensed trust company, DLM Trust announced that it temporarily paused its appointment as an escrow trustee with Patricia to oversee the repayment of $2 million in customers’ assets lost in a hack last year.

"This is because of multiple breaches in the terms and conditions of agreement and trust between Patricia Technologies and DLM Trust Company," Kehinde Lawal, senior associate at DLM Trust, told Bendada.com.

However, sources with insider knowledge revealed that the incident actually occurred in January 2022 and cost the company a staggering $2 million.

Aside from the breach and liquidity challenges, Patricia's leadership recently announced another round of layoffs in a company-wide meeting. Although the retail trading app employed approximately 160 individuals, sources indicate that earlier layoffs occurred in 2022, with no clear explanation provided at the time.

Team leads were reportedly instructed to downsize their teams by up to 80%, causing uncertainty among employees about their job security.

What plan does Patricia has for its customers?

To restore normal operations and rebuild customer confidence, Patricia has engaged the services of a reputable security firm to conduct a comprehensive audit of its operations.

After announcing that it had been a victim of a breach, Nigerian crypto exchange, Patricia, halted withdrawals and deposits on its platform in April 2023. By August 18, 2023, it announced the launch of Patricia tokens (PTK), which all outstanding balances in naira and Bitcoin (BTC) will be converted to. It added that the newly launched token is a stablecoin equal to the US dollar in value — 1 PTK = $1.

However, customers who have not been able to access their funds for months were not too pleased with the announcements.

It also announced that the Patricia token will work like an IOU (I owe you) document, a way for Patricia to acknowledge how much it owes you. Per the whitepaper, "It symbolizes a promise by Patricia Technologies to pay holders 1 USDT for each Patricia Token in the future." It will serve as a "debt instrument" or debt token in exchange for the assets lost during the breach.

Customers whose balances were converted to the PTK can redeem it for USDT, which can then be converted to other cryptocurrencies like BTC or fiat like naira. For customers who lost their balances will be provided with PTK tokens when the Patricia app is launched.

Patricia has not given a specific time as to when customers will be able to convert their PTK tokens for USDT but announced the new repayment regime will be a careful sequel to the company’s repayment exercise which was launched on Monday 20, November 2023.

It is important to note that only the Bitcoin and Naira Balances are affected. Transactions in other cryptocurrencies like Ethereum, DogeCoin, USDT etc., are all still working, and customers who invested in those cryptos could still withdraw their funds.

Happenings like these continue to erode trust and transparency in the crypto ecosystem and one can only hope the issues are resolved and customer funds are released.