Poloniex To Phase Out Margin Trading And Crypto Lending For U.S. Customers

U.S.-based crypto exchange Poloniex has announced that it will drop margin trading for its customer base in the U.S. to ensure that it can remain compliant with all regulatory requirements.

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U.S.-based crypto exchange Poloniex has announced that it will drop margin trading for its customer base in the U.S. to ensure that it can remain compliant with all regulatory requirements.

The company also announced the delisting of three digital assets on October 10, 2018, to “professionalize and improve Poloniex”:

  1. AMP
  2. EXP
  3. GNO

Poloniex embraces regulatory compliance

According to the statement on its blog, the removal of all margin and lending products will take effect by the end of the year, and U.S.-based customers have been advised to begin unwinding margin positions.

The Poloniex team assured customers that existing loans would remain open. As such, they will “continue to fund positions and earn interest for their previously specified duration.”

Additionally, the platform will delist three cryptocurrencies by October 10: Synereo (AMP), Expanse (EXP), and Gnosis (GNO).

The exchange has urged customers to ensure they have closed all trades and withdrawn all balances in the delisted assets by November 9th.

Other than giving users a 30-day period to complete the withdrawals, the exchange’s team has said that it will also send multiple reminders to the community before the deadline.

On September 18, Poloniex announced that it would be delisting eight more coins, to improve the site and provide better services to its customers. Most of the affected coins were of lesser-known digital assets:

  • BitcoinDark(BTCD)
  • Einsteinium, (EMC2)
  • Bitmark (BTM)
  • Gridcoin (GRC)
  • PotCoin (POT)
  • NeosCoin(NEOS)
  • VeriCoin (VRC)
  • BitcoinPlus (XBC)

Poloniex has not given any specific reason that has led to the delisting of these coins, but some possible reasons could be related to security concerns or wallet compatibility.

The latest actions from the Circle-owned platform come in the wake of a report from the New York State Office of the Attorney General about cryptocurrency exchanges, stating that some platforms violated NY rules.

It could also be due to a July investigation that saw the Delaware Department of Justice reached out to the platform following concerns raised by the user community. At the time, users had swarmed the exchange’s social media platforms and customer support center seeking clarification about “locked” accounts.

Some customers reportedly had their accounts frozen after they failed to verify these accounts within a specified period that Poloniex had indicated via email.

The complaints go as far back as January when users raised concerns that the exchange was displaying incorrect balances. These were mainly claims of either missing deposits or those that appeared “stuck” something that saw the exchange’s reputation take a hit.

It is therefore plausible that Poloniex is actively trying to establish a future for itself and improve its business practices in the case of a regulatory crackdown.

Circle cleaning up Poloniex following acquisition

Poloniex was founded in 2014 and is among the top well-established crypto-to-crypto exchanges in the world. The U.S.-based payments tech firm Circle acquired Poloniex earlier this year for a reported $400 million.

It is possible the restructuring and sudden desire to ensure regulatory compliance could have its come from Goldman Sachs-backed Circle, who had indicated that it would be “cleaning up.” The idea is that the firm wants to see the exchange fully regulated as an alternative trading system (ATS).

Poloniex is among the top cryptocurrency exchanges by adjusted trading volume, currently ranked 38th according to XBT.net.

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