LONDON/Fresh YORK (Reuters) – Goldman Sachs-backed cryptocurrency startup Circle has acquired digital token exchange Poloniex, Circle said on Monday, spil it aims to cementlaag its position spil one of the leading players ter the flourishing market.
Neither of the Boston-based companies disclosed the value of the overeenkomst that gives Circle control of a marketplace it said sometimes has daily volumes of more than $Two billion, with around 70 different digital currencies and tokens traded.
Fortune tijdschrift said the overeenkomst wasgoed worth $400 million, citing a person familiar with the matter.
&ldquo,Wij&rsquo,ve bot truly struck with what they have bot able to pull off,&rdquo, Circle co-founder and CEO Jeremy Allaire said.
&ldquo,They defined what originally people thought of spil &lsquo,altcoin&rsquo, exchanges,&rdquo, he told Reuters. The term altcoin describes newer cryptocurrencies than the more established bitcoin and ether.
Circle operates an app-based peer-to-peer payment network using blockchain, the technology which very first emerged spil the system underpinning cryptocurrency bitcoin. It is also one of the leading players te the over-the-counter market for bitcoin trading, and is soon launching a retail-focused app for buying cryptocurrencies, Circle Invest.
One of the best-funded blockchain startups, its investors include Goldman Sachs Group Inc and Baidu Inc.
Circle&rsquo,s founders said they had discussed the acquisition with all of their investors, spil well spil with regulators, and that the overeenkomst wasgoed closed on Friday.
The value of cryptocurrencies – spil well spil the number – has ballooned since the embark of 2017, when they were worth around $17 billion, according to trade webstek Coinmarketcap, with their total value topping $800 billion te January before slipping to around $450 billion now.
There are now more than 1,500 digital currencies and tokens, Coinmarketcap said.
Poloniex is well-known among cryptocurrency investors because it offers trading on a broad range of digital coins, several of which have bot issued through online fundraisers known spil &ldquo,initial coin offerings&rdquo, (ICOs).
Regulators across the world have bot intensifying their scrutiny of ICOs and cryptocurrency exchanges.
The U.S. Securities and Exchange Commission (SEC) te July warned that some of the coins issued ter ICOs could be considered securities, meaning trading them would have to obey with federal securities laws.
&ldquo,Wij intend to proceed playing a leadership role when it comes to national and global regulatory frameworks for this space,&rdquo, Circle co-founder Sean Neville told Reuters.
&ldquo,That includes meeting with the SEC spil well spil obtaining all relevant licensing required for us to support our customers.&rdquo,
Regulators are also keeping an eye on the anti-money laundering and know-your-customer (KYC) practices of cryptocurrency exchanges.
A Reuters investigation published te September showcased that Poloniex had permitted some customers to trade cryptocurrencies and withdraw up to $Two,000 worth of digital coins a day by providing only a name, an email address and a country.
Allaire said Poloniex had instituted utter KYC checks for fresh customers, but he could not confirm the exchange had the identities of all existing clients.
&ldquo,I&rsquo,m not sure that 100 procent of prior clients have gone through all their identity verification requests. I know they have a big backlog of clients ter their KYC queues,&rdquo, he said.
&ldquo,But obviously now that wij operate the company wij&rsquo,re going to ensure that the business is compliant te every way it needs to be.&rdquo,
The exchange is not permitted to accept Fresh York residents because it lacks a state license to operate a cryptocurrency exchange, but the Reuters investigation found two Fresh York residents who had claimed that they lived elsewhere and were able to trade on Poloniex.
&ldquo,Clearly, people can get around things like IP (internet protocol) limitations, and other confinements, and people do it all the time. People evade geo-blocking mechanisms, and it&rsquo,s difficult to fully police. So it&rsquo,s possible that some people have snuck through that, and that&rsquo,s obviously something wij take very gravely,&rdquo, Allaire said.
Circle said that te the coming years, it expected to grow the Poloniex exchange out to include other non-crypto assets, such spil physical goods and financial products such spil derivatives.
&ldquo,Wij look forward to bringing Circle&rsquo,s practice to increase the scalability and reliability of our toneelpodium and operations,&rdquo, Poloniex said te a statement on its webstek.
Reporting by Jemima Kelly, Editing by Abhinav Ramnarayan and Robin Pomeroy