Crypto Exchange Catastrophe: Poloniex Spin Out Leaves Investments Spinning At Circle


This past October, the Boston-based, Goldman Sachs-backed financial services company Circle, announced that it would “spin out” crypto exchange Poloniex into its own company, selling it to an investment group with backing from Tron founder Justin Sun.

Since the spin-out, the two brands have seemingly spun out of control, with Poloniex causing a stir surrounding the brand’s integrity, and Circle threatening to either turn investor’s assets over to the government, or charge fees for leaving assets on the platform.

Circle Could Charge Dormancy Fee, or Turn Crypto Assets Over to US Government

One of the bigger news stories of early 2018, was the Goldman Sachs-backed Circle buying cryptocurrency exchange Poloniex for $400 million, in an effort to tap into the emerging fintech industry.

Related Reading | Buy High and Sell Low? Circle Dumps Poloniex As Crypto Market Interest Wanes

But Circle eventually turned its focus on the USDC stablecoin, and after US regulators began putting pressure on platforms catering to US-based investors, Poloniex began to suffer.

In October, Circle revealed it would be selling Poloniex in a “spin out” that would lead to additional investment in Poloniex. However, it also meant that US-based crypto investors would soon be banned from using the trading platform.

Poloniex gave ample warning to US-based crypto investors to remove their funds from the platform, but it seems as though not all investors took the warning seriously, as Circle has announced that it will soon take aggressive action with any funds left on the platform.

As of December 16, if US-based crypto investors don’t withdraw their assets, they will lose access to their Poloniex account, the remaining assets will be traded into USDC for storage, and Circle may charge a “monthly service fee and/or one-time dormancy fee.”

Worse yet, Circle may turn over the assets to the US government, in accordance with regulations.

Poloniex Controversy: Delisting DigiByte Token In Cahoots With Justin Sun and TRON

While the news that Circle may soon charge dormancy fees or turn assets over to the state, the Poloniex spin-out is spinning out of control.

The cryptocurrency exchange is currently the subject of controversy after they revealed that DigiByte token would be delisted from the platform.

The project’s founder, Jared Tate, went on a Twitter tirade calling out Tron founder Justin Sun as a “crook.” According to recent news, Sun supposedly confirmed himself as part of the investment group backing the new Poloniex.

Related Reading | Crypto Visualized: Watch the Fall of Poloniex And Rise of Binance 

Hours later, Poloniex tweeted about the altcoin’s removal, causing extreme suspicion across the cryptocurrency community. The common consensus is that Sun allegedly had a hand in DigiByte’s delisting, however, the bold accusations cannot be confirmed and should be taken with a grain of salt.

Featured image from Shutterstock

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