Goldman Sachs-backed Circle Buys Poloniex Cryptocurrency Exchange for $400M
Circle, the peer-to-peer payment services startup, has reportedly bought exchange Poloniex for $400 million.
Job Done Between Circle And Polo
According to Fortune editor Robert Hackett who leaked the news in advance, an official statement will follow Monday. The takeover means a cryptocurrency exchange is now under direct ownership of a Goldman Sachs funded company.
Hackett wrote on Twitter earlier this morning:
Rumors have swirled in recent weeks that Circle has been in talks to buy the cryptocurrency exchange (Poloniex). […] I can confirm here for the first time that, yes, Circle has completed the acquisition. (A source familiar with the terms told me the price tag came to roughly $400 M.)
Rumors have swirled in recent weeks that Circle has been in talks to buy the cryptocurrency exchange @Poloniex. I can confirm here for the first time that, yes, Circle has completed the acquisition. (A source familiar with the terms told me the price tag came to roughly $400 M.)
— Robert Hackett (@rhhackett) February 26, 2018
Circle Takes On Crypto Exchange Giants
Circle had fallen out of favor with diehard Bitcoin fans after it made the decision to divest itself of Bitcoin interaction. One of the pioneering major movers in cryptocurrency, many saw the removal of Bitcoin from the Circle Pay app as a rejection of the more innovative values cryptocurrency represents.
Commenting on Poloniex’s incorporation, however, Hackett saw Circle establishing a firm foothold in the now vastly-expanded crypto corporate arena:
This is a huge coup for Circle—putting it within striking distance of other big U.S. crypto exchanges, like Coinbase’s GDAX, Kraken, and Bittrex.
According to the report, Circle’s revenue from cryptocurrency trading would significantly increase thanks to Poloniex – up to around $1 billion per year, proportionally roughly similar to the combined revenue of the entire exchange sector of South Korea.
Poloniex itself had been facing mounting criticism in recent months. A huge influx of new users over the second half of 2017 saw technical problems and outages at key trading moments as technology struggled to cope with demand.
Also struggling was customer support, a problem repeated across many exchanges in the industry as newbie traders made rookie mistakes and relied on staff to provide a remedy.
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