The Evolution of Poloniex: From Altcoin Powerhouse to Seemingly Biased Exchange

Fintoism Poloniex Exchange

The Poloniex exchange has had a very colorful history. The company has been around for several years, and has gone from being a major player to alienating parts of its community in quick succession.

Poloniex has Been Around a While

The cryptocurrency industry has undergone many changes and transformations. Particularly the exchange and trading platform sector has seen an influx – and demise – of companies and service providers. One of the companies still standing after five years of operation is Poloniex. A major feat in its own regard, as very few companies manage to stick around for that long.

Originally founded back in 2014, Poloniex launched during a time of great uncertainty regarding Bitcoin and altcoins. Regulators had only just begun showing an interest in this industry. Everyone knew it would be a matter of time until the trading platforms came under scrutiny. Even so, the company forged ahead and enabled support for trading various altcoins. 

At its peak, Poloniex was considered to be the go-to altcoin exchange. It had the highest volume for the top altcoins for extensive periods. Sustaining that success was made possible thanks to the team expanding its focus beyond the United States. International demand for altcoins continued to pick up across the globe, and the exchange rode that wave of success. 

The Hack and Other “Strange Incidents”

Nearly every cryptocurrency exchange and trading platform has been hacked at least once. For Poloniex, that hack occurred relatively shortly after its initial launch. The exact circumstances of that incident remain shrouded in mystery today. In the end, the company lost over 12% of all Bitcoin balances. Users were reimbursed out of the company’s pocket, which was widely appreciated.

Unfortunately, that is not the only dubious incident affecting this company. Over the years, there has been a string of unusual developments affecting the platform. Mysterious trading engine hiccups costs a lot of people good money during the 2017 cryptocurrency craze. 

To make things worse, Google researchers identified two mobile applications posing themselves as Poloniex. Neither of these offerings had anything to do with the exchange or its team members. That is, to this day, still the official explanation by the company. 

Customer service-wise, the opinions regarding this exchange are all over the place. Users have shared their complaints for many years now. Many blame the massive growth of Poloniex’s user base for this lack of proper customer service. It is a common theme among bigger cryptocurrency trading platforms, albeit users have also become a lot more demanding. 

Circle Acquisition and Divorce

The year 2018 was very interesting for the cryptocurrency industry as a whole. Besides falling prices across the board, Poloniex was acquired by Circle Internet Financial Ltd. This move took many people by surprise, as the exchange continued to suffer from strange malfunctions and customer service complaints. At the same time, this acquisition could help professionalize the company and its services.

Some sources confirmed Circle Internet Financial Ltd paid $400m for the exchange.  Those numbers were never officially confirmed by either party, yet they see incredibly steep. The deal was approved by the SEC and Circle confirmed it would pursue new licenses to remain regulatory compliant. 

A year and a half later, news broke of how Poloniex would spin out from Circle once again. The decision behind this turn of events was never fully clarified. Some speculate Circle wasn’t too happy with the mess they got themselves into, whereas others claim other factors were at play. To this day, it remains an odd turn of events, although subsequent developments helped shed some light on what might have been going on at that time.

The Justin Sun Angle Raises Questions

Cryptocurrency enthusiasts will be familiar with the name Justin Sun. The founder of TRON has made some interesting investments over the years. The latest investment comes in the form of owning a stake in Poloniex. A group of investors acquired the exchange in late 2019, although most of the details were kept under wraps. 

Once TRX received its official listing on this exchange, crypto enthusiasts started crying foul. Many see this acquisition as a way to gain more control over the industry to favor TRON over other projects. Those allegations have been refuted ever since, although some sense of unease remains in place. 

In the same period, Poloniex’s team acquired TRXMarket, a TRON-based decentralized exchange. It provides the trading of tokens issued on the TRON blockchain. Once this platform was acquired, the team confirmed it will be renamed to Poloni DEX and serve as a non-custodial exchange. 

The DigiByte Debacle

To make things even more intriguing, the Poloniex team made a shocking decision a few days ago. According to the company, DigiByte no longer matches the company’s standards and will be delisted accordingly. While such decisions are not unusual, there is a bigger story to this than just this message alone.

In the hours prior to this “announcement”, Justin Sun and DigiByte founder Jared Tate had gotten into a spat on Twitter. Tate claimed how Poloniex had turned into a “TRX shill factory”, an argument that didn’t sit well with Sun. Hours after this tweet, the exchange suddenly announced it would delist DigiByte “after a careful review”. 

Controversial decisions like these can seriously affect the public’s perception of Poloniex. The acquisition following the Circle spinoff was already controversial, yet the removal of a currency after a dispute with a coin’s founder is something else entirely. For DigiByte, the delisting will not matter much, as Poloniex never generated a high amount of trading volume for this altcoin.

What Comes Next?

Judging by the company’s recent developments, it is impossible to predict what happens next. There is a chance more currencies will be delisted, or more support for Tron-based tokens will be introduced. Rest assured that the cryptocurrency community will keep a close eye on upcoming changes. 

2 thoughts on “The Evolution of Poloniex: From Altcoin Powerhouse to Seemingly Biased Exchange

Leave a Reply

Your email address will not be published. Required fields are marked *