Goldman-Backed Circle Buys Digital Exchange Poloniex

&#x27;The first thing you need to know about Goldman Sachs is that it&#x27;s everywhere. The world&#x27;s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.&#x27;<p><a href="https:&#x2F;&#x2F;www.rollingstone.com&#x2F;politics&#x2F;news&#x2F;the-great-american-bubble-machine-20100405" rel="nofollow">https:&#x2F;&#x2F;www.rollingstone.com&#x2F;politics&#x2F;news&#x2F;the-great-america...</a>

I&#x27;m surprised that Nasdaq, BATS, or some other conventional equities exchange operator hasn&#x27;t gotten into the cryptocurrency exchange business.<p>A lot of the issues with current exchanges is a combination of scaling issues, scaling&#x2F;trust, and regulation. I feel like conventional equities exchange would be able to deal with those issues quite easily

Banking institutions are slowly making crypto more and more legitimate. I hope this trend continues. Disclosure: I REALLY believe in Bitcoin.

&gt; there has been more hesitancy around what to do with digital assets like Bitcoin due to volatility and a history of it being used in shady transactions like drugs and evading taxes.<p>Yes, all of those low-level tax evaders with their thousands of dollars in Bitcoin avoiding taxes via easily traceable transaction and plenty of digital forensic evidence! That&#x27;s the real concern preventing bitcoin&#x27;s adoption by legitimate businesses. &#x2F;s<p>The IRS could employee &lt;10 people fulltime to monitor these guys each year and not break even in returnable taxable income...<p>There are far bigger problems with cryptocurrency adoption&#x2F;scaling that are tirelessly being worked on.<p>Money laundering and tax evasion via cryptocurrencies has hardly resulted in any level of significant criminality, despite the endless years of FUD&#x2F;hype that it&#x27;s attracted...

None of these exchanges regulate against price manipulation.<p>Based on Goldman&#x27;s well documented history of price manipulation tactics (in regulated markets), allowing them to own an unregulated exchange is just about the worst thing to happen to cryptocurrencies in a long, long time.

Serious question: How does Circle afford a $400 million price tag when they&#x27;ve only raised $135 million? Their main product seems to be a Venmo clone, complete with the lack of fees. Surely, they&#x27;re not making that much money selling user data.

I wonder if this says something (good) about the Tether situation, given Poloniex uses USDT.

&quot;If you can&#x27;t beat them, own them.&quot;<p>It will help them perhaps more easily manipulate the market. After all, they can collect info on all the players&#x27; behaviors and predict trends accordingly? Deploy massive amounts of capital where needed? The possibilities are endless.

I wonder if Poloniex will immediately fall under Circle&#x27;s BitLicense. Presumably it will, which is good for those wanting to trade in New York State.

Great article about this acquisition and the emerging world of cryptocurrency according to the Circle founders:<p><a href="http:&#x2F;&#x2F;fortune.com&#x2F;2018&#x2F;02&#x2F;26&#x2F;circle-cryptocurrency-trade-bitcoin&#x2F;?utm_source=fortune.com&amp;utm_medium=email&amp;utm_campaign=term-sheet&amp;utm_content=2018022614pm" rel="nofollow">http:&#x2F;&#x2F;fortune.com&#x2F;2018&#x2F;02&#x2F;26&#x2F;circle-cryptocurrency-trade-bi...</a>

On a related note, is cryptocurrency HFT a thing?<p>As much as I delight in seeing a traditional firms add legitimacy to cryptocurrency, I can&#x27;t help but be slightly suspicious when a known HFT player buys an exchange in a market that&#x27;s largely unregulated.<p>Granted, to the best of my knowledge true HFT isn&#x27;t really possible in the FX market, and major players there still find a way to make everything a veritable cesspool.

Coinbase&#x2F;GDAX has to be feeling pretty good about this. My personal experience with Poloniex was abysmal. It took months before I was verified, and the platform was constantly down and too slow to use.<p>Coinbase&#x2F;GDAX isn&#x27;t perfect by any means, but they do seem to be getting more stable, while doing 3-4x the volume of Polo.

I&#x27;m surprised that Circle and by extension Goldman-Sachs would acquire Poloniex. It was always my relatively unconfirmed belief that, at best, Poloniex had horrible customer support and infrastructure and at worst was insolvent and or doing questionable transactions ala BTC-e.

&gt;Circle’s mobile app lets people make instant money transfers. The company also has a trading operation, which handles about $2 billion in crypto trading a month with large institutional buyers and sellers<p>How does this work now? Like, can you own a large exchange and also trade on it?

The Poloniex press release:<p><a href="https:&#x2F;&#x2F;poloniex.com&#x2F;press-releases&#x2F;2018.02.26-Poloniex-joins-Circle&#x2F;" rel="nofollow">https:&#x2F;&#x2F;poloniex.com&#x2F;press-releases&#x2F;2018.02.26-Poloniex-join...</a>

Surprising!<p>1. But does that mean now that Goldman Sach will allow their clients (or their own internal) to at least allow investment in crypto?<p>2. How to know if there are not manipulating the market?<p>3. If Poloniex suffers liquidity issues (if USDT is invalidated) then is Goldman going to take care of the situation?<p>I genuinely wish now, DEX platforms should be promoted like the one we have for BitShares. Centralised crypto exchanges are beating the purpose of decentralization.

Funny in the light of Goldman Sachs&#x27; statements about the future of cryptocurrencies <a href="https:&#x2F;&#x2F;www.cnbc.com&#x2F;2018&#x2F;02&#x2F;07&#x2F;most-cryptocurrencies-will-crash-to-zero-goldman-sachs-says.html" rel="nofollow">https:&#x2F;&#x2F;www.cnbc.com&#x2F;2018&#x2F;02&#x2F;07&#x2F;most-cryptocurrencies-will-c...</a>

What is the legal structure and country of residence of a company such as Poloniex?<p>What books or websites should one read to learn about such things?

Will Polo be the first shitcoin buffet to offer fiat trading pairs?