Poloniex

Poloniex is a US-based cryptocurrency exchange platform. The company was founded in January 2014 by Tristan D'Agosta and is based in Wilmington, Delaware.

As of May 2018 Poloniex ranked as the 25th largest crypto exchange by data tracker CoinMarketCap.com,^[1] with almost 100 tokens listed and a daily trading volume of $70m. In February 2018, Poloniex was acquired by Circle Internet Financial Ltd., a closely held mobile-payments firm backed by Goldman Sachs Group Inc.^[2][3]

History

In March 2014, Poloniex has suffered a hacker attack, making it lose 12.3% of all Bitcoin it held. On the 4th of March, when it happened, the attack was stopped and the service halted its work for a day. On the 5th the market was unfrozen and CEO D’Agosta made a decision – all balances were evened out to lose these 12.3%. The service fully accepted its responsibility and paid out everything that was lost over the next few months.^[4]

In September 2016, due to regulatory changes, Poloniex has announced an end to service in New Hampshire and it will be suspending all accounts from opening new margin positions.^[5] July 2017, Poloniex announced that they would stop their operations in the state of Washington following the enactment of Senate Bill 5031 or the Uniform Money Services Act.^[6]

In May 2017, law firm Berns Weiss LLP announces that is investigating potential claims on behalf of cryptocurrency exchange users who may have incurred losses due to recent DDoS attacks. Poloniex experienced severe distributed denial of service (DDoS) attacks on May 8 that led to many leveraged positions being liquidated. Berns Weiss LLP claim that a large Ethereum sell order was executed within minutes of a DDoS attack on Poloniex. That was a sell order of enough volume to push down the Ethereum price and therefore liquidate positions that had been placed on margin calls. Many users of the exchanges are under the impression that they are victims of market manipulation and possibly even insider trading.^[7]

In October 2017, Security researchers have discovered two fraudulent apps on the Google Play store purportedly tied to the Poloniex cryptocurrency exchange. Apart from harvesting Poloniex login credentials, the fake apps also try to trick victims into making their Gmail accounts accessible to the attackers.^[8]

In December 2017, Poloniex announced that all traders who use the platform must verify their identity. A while back, Poloniex started to implement an identity verification process for all its new registrants. At the time legacy account holders were provided with the privilege of not being required to submit identity credentials. Now Poloniex has issued a notice to all of its users that legacy accounts will now be required to verify their identities or the unverified accounts will be closed. The exact date for this deadline will be announced in Q1 2018.^[9]

On February 2, 2018, technology blog Modern Consensus reported that Circle, a multi-currency money-sending app, is in the works to acquire Poloniex. Modern Consensus cited two unnamed sources that had information about the potential deal.^[10] Both Circle and Poloniex denied such deal.

On February 26, 2018, cryptocurrency startup Circle has acquired digital token exchange Poloniex. Neither of the companies disclosed the value of the deal that gives Circle control of a marketplace it said sometimes has daily volumes of more than $2 billion. Fortune magazine said the deal was worth $400 million, citing a person familiar with the matter.^[11]

On May 27, 2018, Poloniex froze all unverified accounts without announcing a deadline. In contrary to their previous statements guaranteeing traders would be able to withdraw their funds, legacy account holders are locked out of their account. Poloniex has released a further statement on mandatory identity verification, refusing to address withdrawals for unverified users.^[12] This statement read "We are asking all legacy Poloniex customers who have not provided full identification information in the past to do so now through the Poloniex profile page."^[13][14]

References