Crypto exchange Poloniex has been bought by payments startup Circle. The news was announced in a blog post by co-founder Sean Neville and chief executive Jeremy Allaire this morning on the Circle website and comes as a surprise.
The announcement does not say how much Circle paid for the exchange but it is a tie-up that will help to cement Circle’s position in the crypto world.
Poloniex has fallen behind exchanges such as Bittrex and Binance in recent months although it is often one of the many accounts traders will have in order to make sure they can access the widest possible choice of coins and tokens.
Circle is a decentralised payments platform built on blockchain technology. It had once allowed users to buy bitcoin, it dropped that service, although the cryptocurrency can still be requested or sent from the Circle wallet.
Circle describes itself as one of the “world’s largest providers of crypto asset liquidity” and the US investment bank Goldman Sachs is a major investor.
The management team at Circle has been working with Poloniex for “several months”.
The new owners say they will immediately start to address the customer service issues that have been affecting the Poloniex service. Over the past few months all exchanges in the space have been struggling with outages and other issues as infrastructure buckles under the weight of the surge in interest in crypto as a result of 2017’s breakout for the asset class.
Interestingly, Circle says it will be looking at “connecting” its fiat abilities to the exchange, which currently does not offer fiat trading pairs, by “exploring the fiat USD, EUR, and GBP connectivity that Circle already brings to its compliant Pay, Trade, and Invest products”.
Looking to the future, Circle has a bold vision for Poloniex that sees a brave new world beyond crypto, as it positions it to become a “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”.
Chinese internet giant Baidu, owner of the world’s second-largest search engine, is also an investor in Circle.