Exchange Features and Future Goals

What Is Poloniex?

Poloniex is a digital asset exchange that provides a platform for trading cryptocurrencies, non-fungible tokens, and crypto futures if your country allows access. However, it is slowly becoming more than an exchange, expanding its footprint in the digital space to become involved in the development of the metaverse and all things decentralized finance.

Founded in early 2013, Poloniex emerged as an important and polarizing name in digital asset exchanges, mainly for its relationship with users and transaction security. However, in December 2019, it shut down its services to U.S. users, though it’s still accessible to users outside the U.S.

Learn more about Poloniex and how it is positioning itself to take a significant role in the digital future.

Insights into Poloniex

Poloniex is a cryptocurrency exchange that allows you to buy or sell digital assets, such as bitcoin (BTC), ether (ETH), TRON (TRX), and other altcoins. The exchange guarantees that users will experience safety and security while conducting transactions.

History of Poloniex

Poloniex has had a successful but somewhat turbulent history. It was founded in 2013 and purchased by Circle, a digital asset and financial service company, in February 2018. In November 2019, Circle spun out Poloniex into a new company.

The current Poloniex exchange is now owned by the entity Polo Digital Assets, Ltd., which is backed by an Asian investment agency. As part of the spin-out, Poloniex stopped supporting U.S.-based users, allowing them to move their funds from the platform. 

Concerns About Poloniex

In May of 2021, Poloniex was charged by the Ontario Securities Commission for violating Ontario securities law. In August of 2021, Poloniex settled charges with the U.S. Securities and Exchange Commission (SEC) that it was operating as an unregistered national exchange and offered products considered securities under the Howey test. Poloniex paid $10 million in fines to the SEC.

In January 2022, Poloniex ceased all trading in Ontario, announcing that the territory had become a restricted jurisdiction. On March 9, 2022, the exchange began shutting down its margin and lending products as it worked to build a better trading experience for its users.

In February 2023, the United Kingdom’s Financial Conduct Authority published a warning to users that Poloniex was possibly promoting financial services without authorization and “targeting” people in the U.K.

Poloniex users fell victim to an attack on the platform’s hot wallets in November 2023. More than $114 million was stolen from user’s wallets, suggesting the exchange’s security protocols had gaps. The exchange claimed to have contracted a security auditing firm to identify and help it address any issues.

How Is Poloniex Different From Coinbase?

Poloniex and Coinbase are both cryptocurrency exchanges. However, Coinbase has a much larger trading volume than Poloniex, a 24-hour trading volume of $2.6 billion. Poloniex has about $812 million in 24-hour trading volume.

Coinbase is registered with the SEC to operate in the U.S., while Poloniex no longer does. Poloniex lists 587 cryptocurrencies, only 76 of which have a trading volume of more than 0.01% of the total volume on the exchange. This is likely the main reason its trading volume is so much lower than Coinbase and many other exchanges.

Coinbase, on the other hand, lists 175 cryptocurrencies trading more than 0.01% of its total volume—which is less than half of the coins trading on Binance. In other words, Poloniex is much smaller than many other popular exchanges.

Objectives of Poloniex

Poloniex strives to become one of the most used cryptocurrency exchanges and evolve into an agent of influence and change for the cryptocurrency and digital space. Banking on its experience and longevity in the cryptocurrency arena, Poloniex has positioned itself to act as a mentor and partner in the industry as well as an active exchange.

For example, in May 2022, it announced a partnership with APENFT, a popular NFT marketplace. This partnership signifies the outlook Poloniex has on the future, which is to be a driving force behind the metaverse, cryptocurrency, GameFi, and NFTs.

In March 2022, Poloniex partnered with the Fantom Foundation, a dApp-focused blockchain, to help it develop its highly scalable ecosystem that supports smart contracts. Additionally, the exchange began publishing its Polopedia, a “knowledge base for the crypto-verse” that aimed to inform users and interested parties on everything from cryptocurrency basics to trading crypto using a candlestick chart.

Prospects for Poloniex

While cryptocurrencies are popular and there is a need to facilitate transactions, there is much more going on in the digital landscape than investing and trading. Companies that embrace emerging advancements using blockchain technology will be at the forefront of future developments across many industries.

Because cryptocurrency prices and popularity are uncertain, an exchange that assists or participates in developing digital advancements is much more likely to endure than one that only focuses on the money to be made by facilitating cryptocurrency trading. Poloniex appears to have realized this and is taking steps to remain relevant in a rapidly changing and volatile digital environment.

The Bottom Line

Poloniex is a cryptocurrency exchange available to users in many countries, but it has been banned or is under scrutiny in others. It is slowly adding more services with the goal of being more than a cryptocurrency exchange—it appears to be preparing itself for the future, which it sees as providing services for Web 3, the metaverse, and decentralized finance.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author does not own cryptocurrency