Behind the Curtain of Poloniex Announcements

October 5, 2018 / by Ronald Tichenor

US-based cryptocurrency exchange Poloniex made announcements in recent days that clue us in about what may be going on behind the regulatory curtain.

Yesterday’s announcement by Poloniex that they are discontinuing margin trading and lending for US-based customers was accompanied by an additional announcement that they are delisting Gnosis (GNO), Synereo (AMP), Expanse (EXP).

While there may be immediate repercussions for Poloniex customers and holders of those three coins, there are bigger ripples in the water we need to consider.

Poloniex appears to be going through a general house cleaning and streamlining of its operations with upcoming regulations in mind. It doesn’t help us that we still don’t know what those regulatory standards will be. But we also don’t know whether Circle Poloniex is having conversations with regulators behind the scenes. They seem to be making decisions as if they were, or at least their legal team is making some very specific assumptions.

Part of that cleaning process includes delistings. Poloniex has had a spate of delistings this year going back to May and July. In September, BitcoinDark (BTCD), Bitmark (BTM), Einsteinium (EMC2), GridCoin (GRC), NeosCoin (NEOS), PotCoin (POT), VeriCoin (VRC), and Bitcoin Plus (XBC) were all removed from the platform.

Almost all of those coins suffered severe declines. Just yesterday, Poloniex added Gnosis (GNO), Synereo (AMP), and Expanse (EXP) to the list. This came as a surprise to the Expanse team. Apparently, Poloniex had no communication with them regarding the delisting. It is unknown exactly what prompted these particular delistings, but low volume, listing standards, and compliance were all stated in the announcements.

We have been warning about coming delistings particularly with regards to coins that may have regulatory difficulties with the SEC. We discussed this in our July portfolio update and expect this trend to continue industry-wide.

Related to this whole process is September’s addition to the Poloniex platform of its home-grown, collateralized US dollar stablecoin (USDC). In light of these regulatory decisions, we have to wonder about the future of Tether (USDT) on the Poloniex platform. Given the questions that always seem to surround Tether, it seems logical that Poloniex would want its own audited stablecoin as the default. That leaves Tether the odd man out.

After USDC has some time to gain adoption on the platform, don’t be surprised to see Tether delisted from Poloniex.

So, while these announcements seem like simple restructuring decisions, there may be a bigger meaning behind them. We will likely see more as the industry prepares for SEC compliance. Expect similar decisions in the near future from other US-based exchanges like Bittrex and Kraken.

In light of last week’s 1broker incident, we can expect other international exchanges to begin to position themselves as well.