Circle, a renowned financial services firm that specializes in cryptocurrencies and related mobile payments, yesterday (February 26th) announced that it would be purchasing the cryptocurrency exchange known as Poloniex. The exchange has been operational since 2014 and was at one time considered to be one of the biggest exchanges in the market. Even though a lot of competition has sprung, Poloniex remains to be among the top 20 largest cryptocurrency exchanges by trading volume. According to Fortune, Circle will be parting with $400 million or thereabouts for the acquisition – this move effectively makes Circle one of the most influential and largest companies in the industry.
In an official statement following the announcement, Poloniex said that its teams would be strengthened by the operational and customer support resources from Circle that will help them to scale effectively henceforth.
We recognize that our extraordinary growth these past few years has not come without some growing pains for our users. We look forward to bringing Circle’s experience to increase the scalability and reliability of our platform and operations. – Poloniex.
Circle’s history is quite interesting. It was first pitched as a bitcoin company that intended to make bitcoin more accessible – something along the lines of being the PayPal for bitcoin where the users could buy and sell bitcoin quickly and easily in the simplest way possible. Later, the company went ahead to dub itself as a social payment company, a Venmo competitor. However, the company eventually got back into the cryptocurrency game full swing with Circle Pay.
Circle Pay is Circle’s peer-to-peer payment service that is now one of the companies more critical efforts. Circle also runs an over-the-counter trading desk for large crypto exchanges and investors known as Circle Trade. Circle Trade essentially fosters liquidity between cryptocurrencies and a number of fiat currencies. It also powers Circle Pay. Fortune reveals that Circle Trade manages $2 billion in monthly transactions and it generated close to $60 million in revenue in a span of just three months.
A Timely Expansion?
Now, Circle is expanding its portfolio of products with an easy-to-use investment app called Circle Invest that will mostly cater to people who want to start buying digital currencies. Ultimately, having a cryptocurrency exchange of its own would be great for Circle and this is where Poloniex comes in. Circle intends to build on the work that had already been done by the Poloniex team with the end goal being to push it past being “an exchange for only crypto assets.”
“We envision a robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music, and literature, service leases and time-based rentals, credit, futures, and more,” Circle co-founders Jeremy Allaire and Sean Neville wrote.
Poloniex assured its users that there would be no disruption of the services the exchange offers during the transition. All the updates that will be made in the course of the transition will be done in the background and will be geared towards optimizing user experience, security as well as the overall performance of the exchange.