Goldman Sachs-Backed Circle Startup Buys Poloniex Exchange
Poloniex offers more than 70 cryptocurrencies and ICO-issued tokens, and has daily trading volumes up to $2 billion. CEO of Circle, Jeremy Allaire, said that his company had been “really impressed with what they have been able to pull off” and that Poloniex had “defined what originally people thought of as ‘altcoin’ exchanges”.
In a statement on their website Poloniex admitted that their growth had “not come without some growing pains for our users”. This is where Circle’s expertise comes in. Circle will “immediately begin working alongside the Poloniex team to address customer support and expand operations”.
Circle is a peer-to-peer blockchain payment network and one of the pioneers in over-the-counter Bitcoin purchases. It has managed to secure powerful backers like Goldman Sachs and Chinese tech giant Baidu, and plans to soon to launch Circle Invest, a cryptocurrency trading app aimed at the retail market.
In Circle’s statement they also point to the scalability issues Poloniex has faced: “Poloniex achieved momentum and success with rocket ship velocity — a magnificent accomplishment, but one that also comes with whiplash”. Circle’s immediate focus will be on how best to improve, “customer support and scale risk, compliance, and technical operations to bolster the existing product and platform.”
The focus on compliance is particularly necessary now the SEC has stepped up its oversight of the ICO and cryptocurrency space. Sean Neville, Circle’s co-founder, said that they would be meeting with the SEC and would ensure they get “all relevant licensing required for us to support our customers”.
Once these scalability and compliance issues have been addressed, Circle has big plans for Poloniex, expecting to grow it “beyond its current incarnation as an exchange for only crypto assets”. To the current offering it plans to add tokens which represent “everything of value” including physical goods, real estate and even “works of art, music and literature”.
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