Circle acquires Poloniex for $400 million

Payments Company Circle Acquires Crypto Exchange Poloniex for $400 Million

Circle, a payments and cryptocurrency company that in the past raised millions from various investors, including Goldman Sachs, recently acquired cryptocurrency exchange Poloniex, for $400 million, according to Fortune.

Circle is currently made up of three different parts: Circle Pay for fiat currency transfers, Circle Trade as a cryptocurrency liquidity provider, and Circle Invest, which allows retail investors to get in on cryptocurrency markets.

Now, it acquired Poloniex to serve as a token exchange. The company’s co-founders, Sean Neville and Jeremy Allaire, announced the acquisition through a blog post welcoming Poloniex’s team and community.

In it, Circle’s co-founders reveal that they plan on addressing Poloniex’s customer support problems, and improve its platform by bringing in fiat currency pairs. The post reads:

“We also look forward to scaling Poloniex up and out 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.”

With Circle’s resources, the co-founders noted that the exchange will be able to scale effectively, with risk, compliance, and technical operations handled by the Goldman-backed startup. Before exchanges like Bittrex and Binance showed up, Poloniex used to be the biggest crypto exchange, but it’s popularity started declining when it couldn’t scale and alternatives were available.

While the company plans to address these issues, it’s also committed to maintaining the features and services that helped Poloniex grow the way it did. As such, Circle revealed most changes will happen behind the scenes.

Outlining the future for Poloniex

Neville and Allaire further added that they won’t just help Poloniex scale and add fiat trading pairs. In the coming years, per their bog post, they want to help Poloniex grow from a crypto-to-crypto exchange to a distributed marketplace. The post reads:

“We envision a robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music and literature, service leases and time-based rentals, credit, futures, and more.”

The exchange issued a press release that essentially echoed Circle’s sentiments. By adding fiat currencies and, in the future, physical goods and other commodities, it might allow traders to hedge against cryptocurrencies and become even more popular.

In the past few months, Poloniex lost various traders to exchanges offering crypto-to-crypto trading pairs. At press time, Poloniex is the 14th largest cryptocurrency exchange. In the last 24-hour period, it had a $149 million trading volume, down from over $1 billion at its peak.