Poloniex

Poloniex is a crypto-to-crypto cryptocurrency exchange based in the Boston area, USA. The company was founded in January 2014 as Poloniex LLC, registered in Montana, as it was thought to be a crypto friendly jurisdiction at the time. The company later incorporated as Poloniex Inc. in Delaware February 9. 2016. Poloniex claims to have more than 50 employees. August 29, 2016 Poloniex registered with the Financial Crimes Enforcement Network (FinCEN) as a money service business (MSB) with MSB registration number 310000918440. On February 26, 2018 it was announced by Circle they have acquired Polonieux in a deal worth $400 million USD.

The address of Poloniex is listed as 5 Middlesex Ave, 4th Floor, Suite 400, Somerville, MA[1] on whois.com.

History

In 2014, D'Agosta brought in the UX company RDVO to redesign the Poloniex website [2]. Jules Kim and Michael Demopoulos from RDVO joined Poloniex and is now part of the management team. In December 2014 Poloniex launched the new design of the website.

Poloniex has followed AML/KYC regulations since May 21, 2015.[3] You need to submit an address and phone number for verification if a withdrawal is more than $2,000.00 USD equivalent within a 24-hour period. Should the withdrawal amount exceed $7,000.00 USD equivalent in a 24-hour period then you will need to also submit your US Social Security ID or provide a photo ID. Poloniex defend this move as to "protect ourselves and you from potential criminal activity that could force a shutdown of our services."

As part of their efforts to keep stored tokens on the Poloniex exchange safe the Poloniex team has stated they will disable deposits and withdrawals "of Bitcoin (and all BTC related tokens) any time we deem necessary" to prevent major breaches.

Following the new US Washington State regulations regarding cryptocurrency, Poloniex quit trading in the state as Senate Bill 5031[4] came into effect which requires those trading in cryptocurrencies to apply for a state issued license to operate, and hold contract with a third-party auditor to have their exchange system inspected. Additionally a bond must be tied equating to the value of currency transacted in the previous year. Poloniex, alongside rival exchange Bitfinex, announced they would cease business operations in Washington State as of April 21, 2017 with instructions for affected users to "wind down your account."[5]

Poloniex is as of 2017 having long delays in processing support tickets. Due to the long support ticket backlog Poloniex disabled the trollbox - the name given to 'chatboxes' within the cryptocurrency community. Poloniex itself cites 'operational stress' due to the rapid expansion of tokens which has seen huge increases in traffic from newcomers and veteran traders. The Poloniex exchange doesn't stop trading which is also cited as a major issue compounded by the immense flood of additional activity throughout 2017, where the ever-growing trading volume faces growing pains to cope with the sheer volume of traffic.

Poloniex does not support fiat (USD, EUR, GBP etc.) but focuses on the trade of Bitcoin and altcoins, meaning that your accounts can only be funded by Bitcoin and altcoins respectively. It is considered one of the most diverse of cryptocurrency exchanges in operation around the world despite its operations predominantly focused on the domestic United States market. Bitcoin, Litecoin, Ethereum, and Monero are accepted on Poloniex, as well as around 80 other altcoin alternatives (Dogecoin, Peercoin, Feathercoin, etc.) The expansive selection of listed cryptocurrencies is forever in flux with SJCX, NOTE and NAUT for example having been delisted as of November 7, 2017.

On February 26, 2018 the Poloniex exchange was acquired by Circle for $400 million USD.[6] Circle operates its own peer-to-peer payment service called Circle Pay, as well as an over-the-counter trading desk for cryptocurrency investors and exchanges called Circle Trade and stands as one of the world's "largest providers of crypto asset liquidity".[7] It has been reported that Circle Trade manages $2 billion a month in transactions between fiat currencies and cryptocurrencies, and generated $60 million in revenue in just three months of operation.[8] Circle intend to start a new protocol called Centre that will make Alipay, PayPal, Circle and other digital wallets interoperable, with a "smooth" transition for existing Poloniex exchange users.

Team

Account security

In a press release[9] published on December 27, 2017, Poloneix announced they have "recently completed a major upgrade to our customer identification and verification systems." Subsequently users who have accounts that don't conform to Poloniex's new VERIFIED account status are given a LEGACY status instead, which limits withdrawals to the equivalent of $2,000 USD per day, while completing the new verification safeguards will raise the limit to $25,000 USD or equivalent. LEGACY status accounts will also have trading and lending disabled, open orders closed, auto-renew switched off for loans, margin positions given an 8-week wind down and subsequent closure, deposit addresses revoked and deposits already sent will not be recoverable until verification and "withdrawals will remain enabled at the daily withdrawal limits". A deadline for LEGACY accounts to complete the new verification process to become VERIFIED will be announced in Q1 2018.

Hacks and incidents

  • In 2014, Poloniex lost 97 bitcoins in a hack, which was 12.3% of it's Bitcoins at the time[1]
  • In October 2017 a report from welivesecurity.com[10] raised the alarm over at least two "credential-stealing apps" on the Android-based Google Play disguised as legitimate Poloniex mobile apps for handling user accounts. Additionally from the report, these malicious apps would also try to compromise users' Gmail accounts by making them accessible to attackers. Due to the high popularity of the Poloniex cryptocurrency exchange and the lack of any official mobile app from Poloniex itself, the development and use of these fraudulent apps has been highly attractive to online scammers. The apps noted by welivesecurity.com as frauds are named 'POLONIEX' by a developer of the same name, published between August 28, 2017 and September 19, 2017 and installed by at least 5000 users. The second app named is 'POLONIEX EXCHANGE' by the developer 'POLONIEX COMPANY' and appeared October 15, 2017 and was installed by as many as 500 users before removal from Google Play.

External links

References