United States-based crypto exchange Poloniex is spinning out from Circle to form a new exchange that will not support trading for customers based in the U.S.
New firm receives backing from Asian investment group
The new independent firm, called Polo Digital Assets, will free Poloniex from its parent company Circle, the firm said in an official announcement on Oct. 18. Per Poloniex, this will allow it to focus on the needs of global crypto traders with new features, assets and services to boost its competitiveness in the market.
In a separate blog post, Circle said that Polo received backing from an unspecified Asian investment group.
As part of the move, the firm plans to spend $100 million on the business during the next few years and will reduce all spot trading fees to 0% until the end of 2019, starting from Oct. 21.
Leaving the U.S. market
However, the firm will have to sacrifice its U.S. market to be competitive globally Poloniex wrote. According to the announcement, Polo Digital Assets will not be available for U.S. customers, and Circle will be shutting down operations for U.S.-based Poloniex clients.
Starting on Nov. 1, 2019, U.S. customers will no longer be able to execute trades on the exchange. Once trading is ended, U.S. users will still be able to withdraw their assets through Circle until at least December 15, 2019, the firm said.
Circle cuts several projects in September
As previously reported, Circle acquired Poloniex in February 2018 for $400 million. In late September, Circle announced its decision to pause its weekly crypto market research product Circle Research, following the termination of its payment app Circle Pay on Sept. 13. The firm claimed that it wanted to develop new financial products such as new wallet services and facilitate digital currency adoption through Poloniex.