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Justin Sun, the founder of cryptocurrency firm TRON, has been linked with the purchase of cryptocurrency exchange Poloniex for a while now. However, the billionaire cryptocurrency developer has come out to clear the air on his rumored purchase.
In a tweet put out on October 19, Sun made it clear that he wasn’t looking to make such a purchase, adding that his role as a businessman is to “help his friends,” invest and help companies get themselves off the ground.
Poloniex has moved shop
The struggles of Poloniex have been rather extensive in 2019. Back in July, it moved operations overseas. Circle, the parent company of Poloniex, at the time, cited regulatory uncertainties in the U.S. as part of its reasons for making a move. The firm claimed in a press release shared with news medium CoinDesk that it would be moving to the crypto-friendly island of Bermuda, as it would be targeting its services to customers not based in the United States.
Expanding on the problem, Circle chief executive Jeremy Allaire told CoinDesk that up to 70 percent of people who use Poloniex don’t reside in the United States. Given the regulatory complexities that are currently dragging the American crypto community back, Circle saw it fit to remove the exchange from the country and focus on serving the majority of its customers.
In Bermuda, they had found the perfect host country, a nation with a robust regulatory framework for its crypto space, and a location that will allow Poloniex to continue growing.
However, things got even stranger when an official announcement confirmed that Poloniex would be breaking off from its parent company to stand as an independent organization. The announcement, which was published on October 18, revealed that Poloniex would be leaving Circle to form Polo Digital Assets, effectively taking control of its future.
The exchange claimed in the announcement that the move would allow it to focus on the needs of crypto traders around the world, adding that it will be providing several new features and assets to stay competitive in the market.
A separate blog post from Circle revealed that Polo Digital Assets had been financially backed by an Asian investment group. This is when crypto news medium The Block reported, citing an insider at the exchange, that the investment firm had been headed by Sun.
As part of the move, Polo will be spending about $100 million in the coming years, while also reducing all spot trading fees to 0 percent until the end of 2019. Polo will also remain inaccessible to U.S. customers. Per the release, American crypto traders will no longer be able to trade on Poloniex from November 1, although they will still be able to withdraw their assets until December 15.
Circle and its struggles
The decision to leave Circle seems rather survival-based, considering how much Circle itself has had to change this year. On May 20, the Goldman Sachs-backed financial services firm announced that it would be laying off about 30 members of its team.
In a blog post, Allaire wrote that the move was necessary to ensure the survival of the firm, while blaming the harsh regulatory environment for the situation
In addition to that, the firm announced on September 24 that it would be closing down Circle Research, a division that it launched on October 9, 2018, to help provide insights into the cryptocurrency market. While Circle admitted in its blog post that the division had made some significant progress, there was a need to make some cutbacks.