Circle, a financial technology company specializing in digital assets and over-the-counter swaps, announced on Friday that it has spun off its cryptocurrency exchange Poloniex to an Asian investment group. The trading platform will be rebranded as Polo Digital Assets, Ltd., and will operate as an independent entity. While the financial terms of the deal were not disclosed, Circle had acquired Poloniex for approximately $400 million in February 2018.
U.S. Users Forced Off the Platform
In a blog post, Circle co-founders Sean Neville and Jeremy Allaire revealed that Poloniex will undergo “aggressive hiring” and allocate $100 million for operations management. Starting October 21, Polo Digital Assets will offer 0% trading fees until the end of the year. However, the news came with a major blow for U.S. customers: effective November 1, 2019, they will no longer be able to trade on the exchange. According to the post, “U.S. customers will continue to be able to access and use their wallets and withdraw funds through wallet and custody services operated by Circle until at least December 15, 2019.”
The announcement triggered a wave of frustration on social media and forums. One Reddit user lamented, “I’m getting really sick of losing access to crypto markets due to being a U.S. citizen.” Another called for a guide on how to set up offshore corporations and use VPNs to regain access. Digibyte founder Jared Tate commented, “One major step backward for crypto in the USA.”
Speculation About the Asian Buyer
Community members quickly began speculating about the identity of the Asian investment group. Celia Wan and Frank Chaparro of The Block reported that Tron founder Justin Sun is behind the spin-off. Neither Sun nor Tron Foundation have officially confirmed the claim. In a tweet, prominent crypto investor Anthony Pompliano (@APompliano) said: “Poloniex is moving out of the US to focus on international markets. They won’t even let US customers use their products moving forward. This will become the norm if the US continues to create an overbearing and/or uncertain regulatory environment.”
U.S. Regulatory Crackdown Continues
Poloniex’s exit is the latest in a series of retreats by crypto exchanges from the U.S. market. Binance previously suspended U.S. operations and later returned with a significantly reduced token selection. Bitfinex stopped serving U.S. individual customers in 2017. Last summer, Bittrex banned 32 cryptocurrencies for American users, including QTUM, STORJ, and BCTP.
Since 2017, several U.S. states have tightened regulations on digital asset exchanges and money transmitters. New York’s BitLicense, a 44-page regulatory framework with substantial upfront fees, has driven many crypto businesses — including ShapeShift, Poloniex, and Xapo — out of the state. Circle’s co-founders described the separation as “bittersweet” but noted that “as a U.S. company growing a competitive international exchange, we faced significant challenges.” The move underscores the growing difficulty for U.S. residents to access diverse cryptocurrency markets, as well as the broader tension between innovation and regulation in the crypto space.