Cryptocurrency trading platform Poloniex is spinning out from Boston-based financial services firm Circle which had acquired the exchange just last year for a reported $400 million.
An Asian investment group has stepped in to acquire Poloniex. According to reports, the new investors plan to spend $100 million to develop a new exchange with additional features and a global focus. Dubbed “Polo Digital Asset,” the exchange will prohibit US customers from trading.
Circle will wind down its operations for US Poloniex. Beginning today, US residents will no longer be able to create new accounts on Poloniex and by November 1, 2019, US customers will no longer be able to execute trades on the exchange.
They’ll have at least until December 15, 2019 to withdraw their assets through Circle, according to the announcement,
Poloniex highlights the upside of its latest alignment with Asian investors.
“The spinout will free us to focus on the needs of global crypto traders with new features, assets and services.”
To gain a competitive edge in the vast pool of cryptocurrency exchanges, Poloniex is offering free spot trading as of October 21st until the end of the year for its non-US customers. The exchange says it will continue to offer “highly competitive and creative pricing models for traders” once the new exchange rolls out.
The global focus is intended allow Poloniex to flourish where Circle struggled. The team at Circle acknowledges intense challenges in the US where crypto entrepreneurs continue to clash with regulators as they await more guidance or regulatory approvals to build businesses and blockchain-based infrastructure that can compete in a global market.
In July Circle announced plans to move Poloniex offshore to Bermuda amidst regulatory uncertainty. Now, as the 18-month-old acquisition winds down, Circle remarks on the uphill battle it has faced while having Poloniex under its management.
“We’ve made enormous progress with Poloniex, including massive infrastructure improvements, adding more fiat options with USDC integration, launching best in class native apps for traders, and building global operations capabilities that can deliver excellent customer service.
But we have also faced challenges as a US company growing a competitive international exchange. This spin-out will finally give Poloniex the freedom and capital to compete in the international market, and the leadership team of Poloniex will be equipped to scale and grow beyond the scope of what Circle can provide.”