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Is Poloniex officially dead?

by Pragati Shrivastava

Poloniex, a leading crypto exchange, published a tweet on August 16, 2019, informing users that 23 crypto pairs will be removed from its platform. The exchange team explains that low trading volume has led to this move and that the assets of these pairs will continue to trade separately on the platform. A majority of the trading pairs that are removed are Ethereum based and others have USDT, USDC or XMR as their base currency. This move is the second delisting event on Poloniex, following the first one that was announced on May 29 where nine tokens were delisted for United States customers.

Though Circle took over Poloniex in February 2018, thousands of accounts on the exchange continue to remain frozen due to inefficient KYC documentation. Traders face a dilemma as they are locked out of their accounts with no further course of action. The exchange also faces irregular outages and unscheduled maintenance every few weeks. Poloniex suffered a large scale security breach in 2014, and nearly 12 percent Bitcoin was stolen from the exchange wallet. Since this incident, the exchange has been slowly rebuilding its reputation and security infrastructure.

The exchange claims to have sound security protocols given that the vast majority of its customer deposits are stored offline. Auditing programs are run all day for 365 days a year. This helps the exchange review any suspicious activity, however, the topic of privacy is sensitive as the exchange asks for a lot of personal details to reach level 2 verification. If the user faces a challenge in verification, it may take weeks or even months for the account to be recovered. The customer support team has largely negative reviews from the community especially over the last two months. Complaints on delayed response times and withdrawal issues have been a persistent issue.

The exchange’s owner – Circle has been distancing itself from other products. In June 2019, Circle announced that their Circle Pay mobile and web apps will start the process of discontinuing its functionality, as well as support, for all worldwide customers as of July 8, 2019. They also announced that this change impacts only the Circle Pay app, not other Circle products. Circle did make a commitment to keep Poloniex running as long as cryptocurrencies are mainstream and trade volume consistently increases. Poloniex has not seen any significant increase in trade volume despite aggressively marketing its Margin Trading and lending features.

A decrease in trading volume on Poloniex highly suggests that they are losing traders to other exchanges. Though the exchange continues to support trading, basic operation costs take a hit and this may be unprofitable in the long run. This may further lead to delayed withdrawals, a significant lack of customer support, discontinued trading of more crypto pairs, and unplanned downtime. Several cryptocurrency exchanges have closed shop since 2017 and we wouldn’t be a surprise if Poloniex decides to do so. This begs the question: Where are you trading?

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