Cryptocurrency exchange Poloniex snapped up by Circle

Social payments company plans to turn Poloniex into a 'robust multi-sided distributed marketplace'

Circle, the 'social payments' firm that operates a popular Circle Pay app, has announced that it is acquiring Poloniex, one of the largest cryptocurrency exchanges.

Circle is a fintech startup that originates from Dublin but is now headquartered in Boston, USA. It has so far attracted more than £100m in funding from backers that include Goldman Sachs and IDG.

The Circle Pay app allows users to share funds with no fee attached, for example when settling a restaurant bill.

The company has its roots in bitcoin, operating a bitcoin wallet until last year when a deal with cryptocurrency exchange Coinbase saw that firm take over the service.

It is now focused on using blockchain technology to build money transfer systems on which established fiat currencies can be exchanged.

However, while it may have appeared to be moving away from cryptocurrencies, today Circle announced that it is buying Poloniex, another major US-based exchange.

Poloniex has experienced rapid growth in the use of its services as the result of the cryptocurrency boom and complaints about its customer service have risen at the same time. This is an area that Circle plan to address first, according to the company's blog.

"As a consumer product company, we recognise that customer experience is a core element of product experience. When growing pains mean that onboarding takes extended time for someone, or information about the availability of wallets is lacking for a customer with funds in those wallets, or systems maintenance becomes necessary without notice — we fail to achieve our goals."

Circle also plans to expand Poloniex's reach "through market expansion and localisation, increasing token listings where possible and appropriate, and exploring the fiat USD, EUR, and GBP connectivity that Circle already brings to its compliant Pay, Trade and Invest products," it says.

It commits to maintaining the current features of Poloniex, with stated plans to ultimately expand the platform into 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."

In a press release Poloniex said:

"Circle will immediately begin working alongside the Poloniex team to address customer support and expand operations so that we can continue to scale effectively going forward."

No information about the financial details of the acquisition have been made available. Computing has asked both companies for comment.