After buying Poloniex in 2018 for $400M, Circle spins it out into Polo Digital Assets, backed by an unnamed Asian firm, says it won't serve US customers anymore
Crypto exchange Poloniex is spinning out from its parent firm Circle, the companies announced Friday.
CoinDeskNikhilesh De
Context & Ripple Effects
This closes the loop on one of crypto's priciest bets: Circle paid ~$400M for Poloniex at the 2018 market peak (the acquisition), then spent 2019 shrinking — layoffs of ~10% of staff, a reported new raise, and July's move to serve only non-US users from a new Bermuda office amid mounting US regulatory pressure.
First-order effects
Poloniex exits Circle's balance sheet entirely as Polo Digital Assets, backed by an unnamed Asian firm, and drops US customers outright rather than operating them through Bermuda.
Second-order effects
Circle frees itself to concentrate on what it kept — USDC with Coinbase, SeedInvest, payments — while a fully offshore Poloniex no longer constrains Circle's own US regulatory posture.
Third-order effects
The pattern points toward a structural split in crypto exchanges: US-regulated entities on one side, Asia-backed offshore venues on the other, with acquisitions made at peak prices unwound when the regulatory cost of holding them exceeds their strategic value.
The trend: Crypto firms are responding to US regulatory pressure by geographic separation — ring-fencing compliant domestic businesses and spinning offshore operations out to foreign backers.
2/5: Unfortunately, in order to innovate for global customers, US customers will not be included in the spin out. US customers will no longer be able to trade starting on Nov 1, 2019, and they will have until at least December 15, 2019, to withdraw their assets.
@poloniex
@poloniex on x
1/5: We are spinning Poloniex out from Circle into a new company with backing by an investment group that plans to spend more than $100M developing the exchange to offer new features, services and assets to global customers.
@theblock__
@theblock__ on x
[DAILY] SCOOP: Circle insiders say Justin Sun is leading the investment consortium taking over Poloniex (via @celiawan2 & @fintechfrank) https://www.theblockcrypto.com/ ...
@jasonklau
Jason Lau on x
PSA - “have until Dec. 15, 2019 to withdraw their assets” https://twitter.com/...
@jamestodaromd
James Todaro on x
Poloniex shutting doors to US trading on Nov 1st. It's crazy. Poloniex was one of the most popular exchanges at the start of 2017 and still sold for $400M in early 2018. https://twitter.com/...
@icodrops
@icodrops on x
.@Poloniex is spinning out from Circle into a new company. The spinout will allow Poloniex to focus on the needs of global crypto traders. Starting on November 1, 2019, US customers will no longer be able to execute trades on the exchange. https://medium.com/... https://twitter.c…
@mdudas
Mike Dudas on x
Wow, @Poloniex truly turned into a money hole for Circle https://www.theblockcrypto.com/ ...
@theblock__
@theblock__ on x
BREAKING: @Circlepay is spinning out @Poloniex, which it purchased for $400 million last year. The new entity, Polo Digital Assets Ltd., will invest $100 million to expand Poloniex, which will no longer serve US customers. https://www.theblockcrypto.com/ ...
@fintechfrank
Frank Chaparro on x
Writing has been on the wall for a while. Polo has 1% market share, down from 60+% during the 2017 btc peak. I had heard rumors Circle was looking to finance through an IEO to save Polo, engaged with other exchanges to be bought. We will see if this Hail Mary pass works. https://…
@fintechfrank
Frank Chaparro on x
Circle is spinning out Poloniex. US clients banned starting today. This is rough. https://medium.com/...