Poloniex

From CryptoWiki

Basics

  • Aka Polo Digital Assets, Ltd. acquired by Tron.
  • Founded in 2014, Poloniex is a cryptocurrency exchange. The exchange offers a secure trading environment with more than 100 different Bitcoin cryptocurrency pairings and tools and data analysis for traders. Poloniex employs a volume-tiered, maker-taker fee schedule for all trades so fees are different depending on if you are the maker or the taker.
  • One of the unique tools on the Poloniex platform is the troll box which is constantly filled with user help, trolling and just about everything.
  • A flashcrash in Poloniex's Clam market caused Bitcoin lenders to lose a collective 1,800 Bitcoin or $13.5M; a 77% drop in Clam's value in just 45 minutes could not be handled by Poloniex's automatic liquidity machine, resulting in a socialized loss of 0.4% to all users; Poloniex is looking for defaulting borrowers to repay lender's holdings.

Audits & Exploits

  • From CryptoSec, happened on 4-3-2014:

"Digital currency exchange Poloniex has lost 12.3% of its total bitcoin supply in an attack...97 BTC were taken and 97 BTC were paid back"

Amount stolen: $67,500

IEO Platform

"Poloniex has launched an initial exchange offering (IEO) platform that aligns the exchange more closely with the interests of Tron founder Justin Sun.

Seychelles-based Poloniex – acquired by a group of investors including Sun in 2019 – said Sunday the new IEO platform, dubbed LaunchBase, would serve as a springboard to "help quality blockchain projects grow and further develop their ecosystem." The IEO platform, together with "launch partner" Tron, will promote user adoption through distributing tokens and professional consultation, Poloniex said in a blog post.

Notably, the exchange said Tron's TRX cryptocurrency would be the only eligible cryptocurrency for purchasing new tokens on LaunchBase. Further, the first company scheduled for a sale will be the Tron-based stablecoin lending platform JUST.

The blog announcement is unclear whether LaunchBase is exclusively for Tron startups, or whether projects based on alternative protocols are also welcome."

Takeovers

"Circle revealed in July that it had lost over $156 million on its $400 million purchase of Poloniex, which it spun off just 18 months later to a consortium of unidentified Asian investors."

"Crypto exchange Poloniex is spinning out from its parent firm Circle, the companies announced Friday. According to a pair of blog posts, Poloniex will now become Polo Digital Assets, Ltd., an “independent international company” backed by an unnamed Asian investment firm. The trading platform will not serve U.S. customers after this year. Poloniex said the company has “a multiyear plan to spend more than $100 [million] to develop and expand” its platform. As part of its offers, it will reduce trading fees to zero percent between Oct. 21 and Dec. 31, 2019."

"After the spinoff, Frank Chaparro and Celia Wan asserted that “Tron founder Justin Sun is behind Poloniex’s spin-off.” Others in the crypto industry also assumed Sun had a hand in the crypto exchange purchase. At the time, Sun denied being behind the exchange purchase, but on November 12 he admitted he was part of a group of investors behind the Poloniex acquisition during a live-streamed broadcast published on Twitter. Moreover, since Poloniex left the Circle umbrella, U.S. customers have been banned from using the platform and asked to withdraw coins by a certain date. Circle emailed its U.S. customers this week and detailed that it may charge dormant fees to people who don’t withdraw their crypto and digital assets may be sent to governments.

After the news, Digibyte (DGB) founder Jared Tate took to Twitter and said he was not very happy about the situation. The tweetstorm also attacked the Tron (TRX) network and Tate called Poloniex a “TRX shill factory after making off with U.S. customers’ sensitive data.” The tweets received a response from the Poloniex Twitter account after Tate accused the company of holding U.S. data. “We don’t own any U.S. customers’ data as all of them are preserved by Circle,” the Poloniex account replied to the Digibyte founder. “By the way, after careful review, we decided digibyte is not qualified for our listing standard [and] we will delist DGB soon — Details to be announced.”

The whole story also follows Poloniex’s acquisition of TRXmarket. The largest decentralized exchange (dex) by volume on the Tron network was purchased by Poloniex for an undisclosed sum.

"When Circle bought Poloniex, they responsibly moved assets to better cold wallets and had strong reserves. Around the time that Tron took over Poloniex, it seems some cold wallets drained. Not entirely, just to fractional reserves. Which is odd. If Circle was taking the assets, they would have fully drained the wallets. So why did Poloniex seem to go lower liquidity? Those wallets then drained into exchanges, but, only exchanges that listed Tron.'Around this time, BEFORE the announcement, there was an increase in buying activity on Tron. TRX's price rose around 50% (from $0.14 to $0.21). Did Tron switch Poloniex to fractional reserves to pump their own token price?It might justify the high price paid for a dying exchange? The price action might be unrelated, and Poloniex may simply be cross-market trading on other exchanges. But the sudden shift in cold wallet balance is concerning."

Compliance

"Poloniex has agreed to pay $10.4 million settlement charges with the U.S. Securities and Exchange Commission (SEC) for operating an unregistered digital asset exchange."

Pro's & Con's

  • Pros: fast account creation, feature rich, BTC lending, high volume trading, user-friendly, low trading fees, open API.
  • Cons: Slow customer service, no fiat support.

Team, investors, etc.

  • Got acquired by Dublin-based payments technology firm Circle for $400M. But spun out in 2019.
  • D'Agosta, Tristan; owner (but Circle bought Poloniex), CEO, founder
  • Justin Sun; founder of crypto platform Tron, "said he is part of the investor group that recently acquired Poloniex from fintech firm Circle, after denying his involvement initially."
  • It is one of the whitelisted institutions of the TRON DAO Reserve (TDR), which governs the overcollateralization of USDD (4-11-2022).
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