Goldman-Backed Startup Circle Acquires Crypto Exchange Poloniex

Goldman-Backed Startup Circle Acquires Crypto Exchange Poloniex

Goldman Sachs-backed payments company, Circle announced on Monday that it has acquired one of the most active cryptocurrency exchange Poloniex.

A familiar source told Fortune that the deal closed around $400 million.

Circle is a peer-to-peer payments company that uses blockchain to operate. By this acquisition, the Boston-based startup will strengthen its position as one of the major blockchain-based company imposing a big threat to Coinbase and other exchanges.

“We’re proud to announce that Circle has extended its commitment to a new vision for global finance by acquiring Poloniex, a leading token exchange platform,” wrote founders, Sean Neville and Jeremy Allaire in a post on the company’s website.

The 5-year-old Circle impressively generated over $250 million revenue in the last three months. The startup is well-funded by investors including Goldman Sachs, Chinese internet giant Baidu, and Venture Capitalist Jim Breyer.

Circle founded in 2013, initially enabled customers to buy and sell Bitcoin, however, the startup unexpectedly divorced itself from Bitcoin in 2016 shaking the Bitcoin community and bearing a lot of criticism.

And just when everybody thought the company has permanently abandoned cryptocurrency, BOOM! Circle buys one of the leading U.S crypto exchanges.

Poloniex is a U.S cryptocurrency exchange that trades about 70 different types of virtual currencies on its platform. The exchange had been going through a lot of technical issues lately. Customers have widely complained about social media platforms about missing deposits, locked accounts, double withdrawal funds and some support issues.

However, the acquisition might help Poloniex sort out all its problems and manage a stable platform for an influx of customers. In fact, Circle itself intends to fix the holes first.

In a blog post, Circle promised “First and immediately…to address Poloniex customer support and scale risk, compliance, and technical operations.”

Reportedly, Circle will able to increase its revenue to $1 billion per year after buying Poloniex.

Also Read: U.S. Senate Debates on Cryptocurrency Regulation

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