Circle, a major digital asset financial services firm, has issued a stark warning to Poloniex US customers: withdraw all cryptocurrency assets before December 16, 2019, or risk monthly service fees, one-time dormancy charges, and even the possibility of unclaimed holdings being sent to state governments. The move stems from Circle’s decision to divest the Poloniex exchange, which it acquired in 2018.
Background: The Poloniex Spin-Off
In October 2019, Circle announced it would sell the Poloniex trading platform and end its support for US customers effective November 1. While the company initially gave users several weeks to withdraw funds, the December 16 deadline marks the final cutoff. On that date, Circle will shut down the existing Poloniex US website and terminate all wallet access. Any remaining cryptocurrencies — including Bitcoin, Ethereum, and other altcoins — will be gradually converted into USDC, a dollar-pegged stablecoin issued by Circle itself.
Circle plans to launch a new withdrawal site in the first half of 2020 to allow former users to retrieve their USDC, but that site will impose service fees on stored funds. The company stresses that charges will never exceed the total account balance.
Fee Structure and Abandoned Property Risks
According to Circle’s blog post, two types of fees apply to users who fail to withdraw their assets before the deadline: a monthly service fee assessed as long as assets remain on the platform, and a one-time dormancy fee triggered when an account becomes inactive under applicable regulations. The most alarming provision, however, concerns dormant accounts.
“Assets in dormant accounts may be sent to the account holder’s state, consistent with regulations for abandoned property,” Circle stated. “Poloniex US also may charge inactivity fees prior to sending abandoned property to a state consistent with applicable regulations.” This essentially means that if a user does not claim their crypto within a certain timeframe, the state government could become the legal recipient of those assets.
In the United States, each state has its own unclaimed property laws, typically requiring tangible property to be escheated to the state after a period of inactivity (usually 3–5 years). However, the application of these laws to cryptocurrency — a purely digital and often pseudonymous asset — remains legally untested. Critics argue that the custodial nature of exchange wallets might give states a claim, but enforcement mechanisms are unclear.
User Reactions and Industry Implications
The warning has stirred anxiety among Poloniex US users, many of whom had already moved their funds but some may have forgotten old accounts or lost access to private keys. Community forums are filled with complaints about the short notice and the potential loss of value if assets are forcibly converted to USDC during market volatility.
“I had a small amount of altcoins sitting on Poloniex that I forgot about,” one Reddit user wrote. “Now I have to rush to log in and withdraw, or risk my coins being turned into USDC and maybe even sent to the government. This is insane.”
Legal experts note that Circle’s move is not unprecedented in traditional finance: banks routinely turn over dormant accounts to state treasuries. But for a nascent industry built on self-custody and decentralization, the prospect of a centralized custodian handing over user assets to the state is seen as a cautionary tale. It underscores the risks of leaving funds on exchanges for extended periods.
Circle has not disclosed the exact fee amounts or how it will coordinate with state agencies to handle the transfer of digital assets. The company is also facing ongoing class-action lawsuits from Poloniex users related to the 2019 shutdown and lost funds.
What Users Must Do
Circle urges all Poloniex US customers to log into their accounts and withdraw any remaining cryptocurrencies before the December 16 deadline. After that date, only the USDC equivalent will be recoverable through the future withdrawal site, subject to service fees. Users concerned about state seizure should act immediately, as the window for accessing original tokens is closing.
As the crypto industry matures, this incident serves as a reminder that exchange insolvency or restructuring can have real consequences for asset ownership. While Circle promises that fees will not exceed account balances, the possibility of permanent loss due to government escheatment is a new frontier that regulators and lawmakers may need to address.