Poloniex cuts off U.S. customers under new ownership

Poloniex announced today that they are splitting from Circle and need to abandon U.S. traders in order to be competitive in the global market. As a U.S. based exchange, Poloniex has done only $577 million in volume over the last 30 days which is less than half of what non U.S. compliant BitMex does in a day.

Polo Digital Assets, Ltd. will now take full ownership of Poloniex and be backed by a “major investment group.” The block was reportedly told by insiders that Justin Sun may be heading the investment group and therefor in charge of Poloniex.

Until the end of the year, Poloniex will not be charging spot trading fees. Spot trading refers to purchasing crypto with cash.

In 2018, Poloniex removed leveraged products from their U.S. exchange in order to become more “professional” and compliant with U.S. regulations. Popular exchanges like BitMex, Binance and FTX have all distanced themselves from operating in the U.S. in order to keep up with demand for leveraged trading.

Other reasons Poloniex may have decided to avoid U.S. regulations is so they won’t have to require users to verify their identity before trading. The U.S. has stringent KYC (know your consumer) policies requiring proofs such as drivers licenses and social security numbers before users are allowed to make transactions. Holding sensitive identity related information on an exchange can be cause for concern as Binance had tons of information leaked earlier this year.

Lastly, it is harder to get coins approved for listing in the U.S. Binance went from offering hundreds of coins to less than twenty this year when they released a U.S. only exchange. Their non-U.S. exchanges only saw an increase in futures and leverage.