The News Heard Around the Crypto World: Circle Acquires Poloniex

Goldman Sachs-backed Circle moved the crypto market Monday with its announcement that it’s acquired Poloniex, a leading token exchange platform.

The crypto space is digesting a significant acquisition announced today that seems to have made crypto players enthusiastic, if even for just a few hours.

It was announced that Circle had acquired Poloniex.

As the news of the payment startup’s acquisition spread, Bitcoin’s price pushed above $10,000.

Prior to the announcement, Bitcoin was struggling to stay above $9,500 at around 3:30 a.m., New York time. At the time of writing (noon), it was holding around $10,200.

The synergies

There are a couple of reasons why this acquisition makes sense for both players. Circle has the reputation for being a leading liquidity provider to institutions and investors across a broad number of crypto assets since the early days of the industry.

It’s been credited with helping to create seamless consumer experiences with its Circle Pay. This service lets people send and receive money in fiat currencies the same way they send texts and emails.

Poloniex said that considering Circle's depth of experience, it could not imagine a better strategic partner to help it scale its business beyond this phase of initial growth.

In a statement, Poloniex officials said:

“In working closely with the Circle team to formalize our union, we have found a shared vision for a future in which decentralized cryptocurrency protocols create a far more open, inclusive, and evenly distributed global economy.”

Circle co-founders Sean Neville and Jeremy Allaire said in a joint statement about the acquisition:

“We’ve been privileged to get to know and collaborate with the Poloniex founders, and their teams over the past several months as we contemplated this union and completed extensive due diligence together, and we learned that we share a similar perspective on the future as well as the same sharp sense of urgency about immediate needs and challenges.”

Poloniex is thought to be in the top 10 as far as its market share of U.S. dollar-bitcoin trading volume.

But for Goldman Sachs, VCs

Goldman Sachs was a lead investor in Circle’s 2015 funding round. Circle raised $50 million from the investment bank. Others that contributed included IDG China, Breyer Capital, Accel and General Catalyst.

Overall, Circle has raised $138 million through four funding rounds since 2013.

Assurances given for this deal

Poloniex was clear to note in its statement that it would “remain committed to preserving the features and functionality that first drew interest to our platform.”

“Any updates we made in the course of the transition will be behind-the-scenes and focused on strengthening user experience, platform performance, and security, according to Poloniex.

Poloniex adds that users’ funds “will remain safe and access to account functionality uninterrupted throughout.”

Circle officials echoed these assurances, noting that taking care of customers is a top priority. In its press release on the acquisition, it’s stated:

“Firstly and immediately, you can expect Circle to address customer support and scale risk, compliance, and technical operations to bolster the existing product and platform.

Poloniex achieved momentum and success with rocket ship velocity — a magnificent accomplishment, but one that also comes with whiplash. Circle is a global company with the skill and experience to help in these areas as an immediate priority.”