According to CryptoCompare (an online data aggregator) ranking based on 24-hour trading volume on August 10, 2020, Poloniex ranked 52nd among global cryptocurrency exchanges. CryptoCompare also published a quality ranking of cryptocurrency exchanges, giving Poloniex's exchange quality an AA rating, ranking it second out of 211 platforms reviewed globally in June 2019. By mid-February 2021, although its exchange quality rating had dropped to BB, Poloniex still ranked 20th globally in 24-hour trading volume according to CryptoCompare data.

Poloniex was hacked two months after launch, resulting in a 12.3% loss of customer Bitcoin holdings.

Circle Internet Financial, Ltd. acquired Poloniex on February 26, 2018, for a reported $400 million. In a blog post about the acquisition, Circle co-founders Sean Neville and Jeremy Allaire stated that in addition to leveraging Poloniex's geographic coverage in 100 different countries, they looked forward to "scaling Poloniex through market expansion and localization, increasing token listings where possible and appropriate, and exploring the fiat USD, EUR, and GBP connectivity that Circle already brings to its compliant Pay, Trade, and Invest products."

History

According to CoinMarketCap (an online data aggregation and reporting service), Poloniex listed over 100 cryptocurrency pairs and was the 35th largest cryptocurrency exchange by trading volume at the end of September 2018. However, by the end of December 2019, Poloniex's market share had declined, with its ranking among cryptocurrency exchanges dropping to 75th place. According to Poloniex's parent company Circle, 70% of Poloniex's customers were from outside the US as of July 2019. As mentioned earlier, by August 2020, Poloniex ranked 52nd by trading volume.

Poloniex was one of 13 cryptocurrency exchanges operating in New York State that provided detailed information about its operations and policies in response to the New York Attorney General's Virtual Markets Integrity Initiative, and was one of nine exchanges that responded. In its response, Poloniex stated that, among other things, it offered margin trading on its platform.

In October 2018, Poloniex announced it had removed margin trading functionality to comply with US federal law. In May 2019, the exchange announced it would delist trading for nine cryptocurrencies - ARDR, BCN, DCR, GAME, GAS, LSK, NXT, OMNI, and REP - due to "regulatory uncertainty."

After obtaining a Digital Asset Business Act license from Bermuda, Circle announced in a blog post on July 22, 2019, that Poloniex would move its business and operations supporting non-US residents to a Bermuda office. The company stated that its new Bermuda license covers the operation of payment services, custody, trading, exchange, and other financial services for digital assets. The company also said it would expand its list of tradable instruments for non-US persons.

On October 18, 2019, Circle announced that it would spin off Poloniex to an Asian-backed investment group, Polo Digital Assets, Ltd. After repeatedly denying involvement in the investment, TRON founder Justin Sun stated at a joint Poloniex-Tron conference that he was involved in the investment. Poloniex ceased trading for US residents in early November 2019.

In a blog post on December 19, Poloniex announced a new customer type - Level 1, which does not require anti-money laundering procedures for withdrawals of cryptocurrency or fiat currency valued up to $10,000.

Poloniex Compensates Margin Losses Through Socialization

On May 26, 2019, the price of a token called CLAM trading on Poloniex crashed. As a result, investors trading CLAM defaulted, causing significant losses to Bitcoin margin lenders. Poloniex attempted to compensate for this loss through socialization (borrowing from customer funds), borrowing about 1,800 Bitcoins from active Bitcoin margin loans. A representative of the exchange stated that the loss was shared among all Bitcoin lenders, including those who did not have active Bitcoin loans during the crash. The representative said: "All Bitcoin loans on Poloniex come from a common pool shared by all markets and borrowers, but we want to emphasize that we are pursuing defaulted borrowers to repay the Bitcoin they owe to lenders and exploring other ways to compensate for the loss." The representative also stated that as the exchange recovers funds, they will "return them to affected lenders."

On June 14, Poloniex distributed a total of 180 Bitcoins to 10% of users affected by this crash. In August, Poloniex began returning Bitcoin transaction fees to lenders who lost funds in the CLAM crash. The exchange stated in a blog post that it would pay fees for affected accounts starting from June 6 until they are fully repaid.

In March 2020, Poloniex issued a statement to users affected by the CLAM crash, saying it had paid "up to 0.0047 Bitcoin in compensation" to each affected customer who had not yet received full compensation. The statement said that affected users with losses below this amount had been fully compensated, while trading fees for users who had not yet been fully compensated would be adjusted to help recover remaining losses. The statement acknowledged that not everyone would be satisfied with this compensation plan, but Poloniex would continue to work on repaying customers until everyone is properly dealt with. Some traders expressed anger, believing that Poloniex's distribution of Bitcoin to customers after the Bitcoin price crash (due to the market collapse caused by the coronavirus pandemic in March 2020) was a way to cheaply compensate customers affected by the crash.

Steemit Soft Fork Controversy

On March 2, 2020, Poloniex sparked public controversy by joining Huobi and Binance in using their collective voting power from STEEM tokens they held to reverse Steemit's soft fork. The soft fork was implemented by Steemit's "witnesses" who were trying to prevent TRON from increasing its influence over Steemit after the two organizations reached a strategic partnership. This controversy and its accompanying turmoil led to Steemit asserting extraordinary rights to control over the STEEM blockchain.

Litigation

In June 2020, Poloniex, along with Bittrex, was added as a defendant in a class action lawsuit filed last August against Bitfinex and Tether. The lawsuit alleges that the parties participated in a "sophisticated scheme that utilized disruptive innovation - cryptocurrency - to defraud investors, manipulate markets, and conceal illicit proceeds." The complaint alleges that these platforms colluded to transfer US Dollar Tether between each other that was not fully backed by US dollar deposits.

Products and Services

Poloniex offers trading for over 100 digital assets. Users must be 18 years of age or older. Poloniex has no deposit or withdrawal fees but charges a fixed rate of 0.2% for all trades.

By August 2020, according to data from The Block Crypto, Poloniex had become one of the leading decentralized finance (DeFi) token trading platforms.

Poloniex offers decentralized finance trading through its "Poloni DEX" marketplace. Additionally, it offers Bitcoin futures trading separately.

Digital Asset Margin Trading

Poloniex offers margin trading for non-US clients. Poloniex's traders, as well as Poloniex itself, lend cryptocurrencies to borrowers at certain interest rates. These loans come from a public digital asset pool shared by all markets and borrowers.

Poloniex Delists 23 Trading Pairs

Due to low trading volume, Poloniex announced on August 15, 2019, that it would delist 23 trading pairs from its platform the following day.

The announced delisted trading pairs include LTC/XMR, DASH/XMR, ZEC/XMR, MAID/XMR, NXT/XMR, BCN/XMR, LSK/ETH, GNT/ETH, MANA/ETH, QTUM/ETH, STEEM/ETH, OMG/ETH, LOOM/ETH, SNT/ETH, CVC/ETH, KNC/ETH, GAS/ETH, BNT/ETH, LOOM/USDT, SNT/USDT, KNC/USDT, BNT/USDT, and FOAM/USDC.

Key Person

Tristan D'Agosta - Founder and CEO