Poloniex, one of the oldest cryptocurrency exchanges in the market, has recently started the way towards closing down its crypto margin and lending products for US-based users.
The Poloniex team, in their official announcement on October 4, stated that “Before the year’s end, we’re finding a way to remove our margin and lending products for US-based customers. These changes are a part of our ongoing commitment to guarantee that Poloniex follows regulatory requirements in every jurisdiction.”
Before the launch of BitMEX in 2014, the most widely used cryptocurrency trade for margin exchanging, Poloniex served the majority of the active merchants in the digital asset trade market. Poloniex was launched in January of 2014, and it spoke to many traders because of its coordination with many tokens and digital assets.
The trade began to battle with a backlog of customer support tickets, which in the end drove Circle, a Goldman Sachs-sponsored crypto money behemoth, obtained Poloniex at a valuation of $400 million.
This week, Circle expressed that its primary vision with Poloniex is to professionalize and improve the exchange in terms of security, consistency, and proficiency. As a part of the initiative, the organization chose to close down margin exchanging and delist several tokens.
“As a component of our effort to consistently professionalize and improve Poloniex, we are delisting several assets and finding a way to expel our margin and lending products for US-based customers,” the Circle group said.
It is possible that the close down of 1Broker, a popular cryptocurrency exchange, by the Federal Bureau of Investigation (FBI) and the US Securities and Exchange Commission (SEC) for illegal dispersion of securities have led trades in the US to be more cautious of their approach in supporting digital currencies and exchanging activities.
To prevent conflicts with the authorities, crypto money trades have begun to execute better Anti-Money Laundering (AML) systems and Know Your Customer (KYC), actively cooperating with regulators.
Several users of Poloniex have reacted positively to the approach of Circle, as it would enable the trade to solidify its situation in the US market as one of the few consistent trading platforms.
But, numerous loyal users of the trade responded adversely to the delisting of tokens and elimination of margin trading. One client remarked:
“The securing/takeover of Poloniex by Circle has been a fail. they KYC’d everybody and a large portion of the clients left, then burned most of their clients in the wake of delisting over 30% of their coins and more clients left, and now they are evacuating margin/funding services.”