The 25th of July saw the United States Department of Justice take keen interest in the affairs of Poloniex. This is a cryptocurrency exchange platform based in Delaware. The thing is that this interest is probably not in the best interest of the cryptocurrency exchange platform. The Chief Special Investigator of the Investor Protection Unit contacted users of the platform. The inquiry through emails was to ask whether they were having problems with their accounts.
While it might be seen as surprising, their inquiry wasn’t uncalled for. The last few months have seen users barraging the exchange’s social media accounts. Why? Because they have a lot of complaints about them being locked out of their accounts. Without any fault of their own, users are seeing their accounts frozen by the cryptocurrency exchange. This has got the DoJ to spring into action. They are now investigating the matter further and that’s bad news for Poloniex.
The 30th largest cryptocurrency exchange in the world, Poloniex was launched in 2014. Circle acquired the exchange in the February of 2016 by Circle. This company’s backed by Goldman Sachs. They plan to grow Poloniex from being more than just a cryptocurrency only exchange.
Problems for Poloniex
December 2017 saw the cryptocurrency exchange announce stricter regulations. Their KYC and AML procedures were to become more rigorous according to the officials from Poloniex. Verification of accounts was being required by the cryptocurrency exchange. Customers who did not verify accounts within 14 days would see their accounts frozen. A lot of customers became confused when it actually started happening.
While that was still understandable, there was a growing number of complaints from customers who complied. They were also seeing their accounts frozen.
The problems continued to grow. More and more customers were facing the problem and the customer support from Poloniex simply kept ignoring the complaints. The Reddit forums started to blow up talking about this issue.
This has led to Craig Weldon, the Chief Special Investigator of the IPU to contact around 100 customers. Of course, the US Department of Justice has not commented on the situation. The reason for that is that this is an open investigation. While we may not know the full length of the matter right now, the fact that the DoJ is looking into the matter means Poloniex is in trouble.
It remains to be seen what action will be taken by the United States Department of Justice. If there’s one fact we do know, Poloniex is indeed in trouble.
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