Poloniex is a cryptocurrency exchange that has been operating for several years, undergoing various changes during that time. Given that the internet doesn’t always provide the latest and most accurate information about crypto exchanges, we have taken the initiative to offer you the most precise details about Poloniex, including its verification process and business practices.
In this guide, we will briefly cover Poloniex’s history and provide all the information you need to start trading on the platform, including the time required to verify your account.
About the Poloniex Exchange
Poloniex is currently based in Seychelles, an offshore island country in the east of Africa, but it conducts business globally in many countries. Poloniex is largely unregulated and does not support direct fiat-to-crypto or crypto-to-fiat purchases and withdrawals. However, it is possible to make fiat deposits and withdrawals (on a few select digital currencies) depending on your region, thanks to the trading platform’s partnership with the payment processor company Simplex.
Poloniex offers a large number of crypto trading pairs, including many altcoins that are not listed on other cryptocurrency exchanges. As an unregulated exchange, Poloniex does not require customers to complete identity verification to trade on their platform. All customers are automatically granted level 1 verification status upon signing up and can start depositing, trading, and withdrawing crypto immediately. Identity verification is relatively simple if you wish to upgrade your account level, and you are not required to present an official ID. Poloniex users with level 2 accounts can withdraw larger daily amounts.
History of Poloniex
The Poloniex cryptocurrency exchange was launched in the United States in 2013 and operated from within the country until 2020. In 2014, Poloniex customers were able to trade more than 20 altcoins issued in different ICOs, in addition to trading Bitcoin. However, many of the cryptocurrencies offered were underdeveloped projects or outright scams, which brought Poloniex under the scrutiny of the U.S. Securities and Exchange Commission (SEC).
Poloniex lost 12% of its Bitcoin supply in a major hack in 2014. The trading platform used an unorthodox method to protect its liquidity, socializing the losses by deducting from all Bitcoin balances on the platform to prevent customers from leaving the exchange. Poloniex paid back the customers their lost funds within a few months.
In 2017, Poloniex listed numerous altcoins with USDT and USDC stablecoin pairs, allowing customers to buy and trade several cryptocurrencies. In 2018, Poloniex was purchased by Circle, the blockchain and peer-to-peer payment company that issues the USDC stablecoin.
Many considered this an expensive purchase, as Circle paid 400 million dollars for Poloniex and had to pay 10 million dollars in fines to settle an SEC investigation that found Poloniex had violated US regulations.
Circle implemented identity verification on the Poloniex trading platform to comply with Financial Crimes Enforcement Network’s (FinCEN) Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. However, implementing KYC and AML checks over-burdened the trading platform, leading to many customer complaints about slow verification updates. Eventually, Circle spun out the trading platform to a consortium of investors, and Poloniex became its own company under Polo Digital Assets, Ltd.
How Long Does It Take to Verify Your Account on Poloniex?
While Poloniex required identity verification during its time as a Circle subsidiary, you currently do not have to complete identity verification to trade on the platform.
Back in 2017, when Poloniex made KYC verification mandatory, all customers had to complete identity checks to withdraw their assets from the trading platform. This caused significant frustration for many traders, as they couldn’t access their assets.
Since Poloniex is no longer based in the US, it doesn’t perform KYC checks or enforce identity verification. You only need to verify your email address to start trading cryptocurrencies on the platform.
All Poloniex customers automatically reach level 1 status by registering their email with the Poloniex trading platform. You can deposit crypto to your account and start spot trading with a Level 1 account. The daily withdrawal limit for tier 1 accounts is 10,000 USD.
Level 2 Poloniex accounts allow you to engage in margin trading and have increased withdrawal limits. You can upgrade to level 2 by submitting a government-issued ID and a photo of yourself holding a note with the date and the name of the trading platform. You may also be asked for additional documents, such as a utility bill, your address, and your phone number in certain cases.
Account verification should normally be completed within minutes, but if there is a delay, you should contact Poloniex customer service by creating a support ticket.
What Is the Purpose of Account Verification?
Poloniex uses identity verification software to ensure security on the platform. However, there have been instances where hackers who stole from another platform were able to cash out through Poloniex, leading to criticisms that Poloniex doesn’t have adequate security measures.
Poloniex is primarily a crypto-to-crypto exchange. If you want to use a debit or credit card to purchase crypto or use your bank account to sell cryptocurrency on the platform, you need to register with Simplex banking first and complete a KYC check.
Bitcoin and Other Supported Cryptocurrencies
Poloniex offers more than a hundred digital assets on its trading platform, including popular digital assets like Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), Bitcoin Cash (BCH), Tron (TRX), Ripple (XRP), Dash (DASH), Stellar (XLM), and Monero (XMR). Many altcoins can be traded with stablecoins such as USD Coin (USDC) and Tether (USDT).
In 2019, Poloniex removed many cryptocurrencies from its margin trading pool after a flash crash that cost Poloniex customers some 13 million USD. The CLAM token that caused the crash, as well as several others, was removed.
Deposits and Withdrawals
Poloniex is mainly a crypto-to-crypto exchange. This means you can easily deposit and withdraw cryptocurrency from the platform, but fiat deposits and withdrawals are a different story.
If you want to deposit or withdraw fiat currency on the trading platform, you need to go through the Simplex banking system. Simplex is available to customers in the UK, Canada, Australia, and certain parts of Europe. You need to complete Simplex identity verification with a government-issued ID to use the service.
You can use the Simplex credit card/debit card or open a Simplex bank account to deposit fiat into your account. You can buy several crypto assets with Simplex banking, including Bitcoin, Ethereum, Ripple, Monero, and Binance Coin.
Moreover, you can use your Simplex bank account to sell Bitcoin and the ERC-20 version of Tether and receive fiat currency, but this feature isn’t supported for other cryptocurrencies. If you want to cash out your altcoins, you need to move your crypto assets to another exchange that supports crypto-to-fiat conversion first, like Coinbase, Kraken, or Gemini.
Simplex charges high fees for each transaction (10 USD or 3.5-5% of your purchase, whichever is greater).
Poloniex also applies trading fees on your transactions. Trading fees vary depending on your monthly trading volume and order type. The trading platform uses a maker/taker fee model to calculate fees. If your transaction fulfills an already existing order in the order book, you will be charged more as a liquidity taker. This means it could be quite expensive to buy Bitcoin and other altcoins with fiat currency on Poloniex.
Conclusion
Poloniex is largely a crypto-to-crypto trading platform, but you can use Simplex banking to convert fiat to crypto and vice versa on the exchange. Poloniex doesn’t require KYC checks or identity verification for level 1 customers, allowing you to start trading cryptocurrencies right after signing up with your email.
However, if you want to deposit and withdraw fiat from the exchange, you need to verify your identity through Simplex. The identity verification process on Poloniex is straightforward, requiring only a government-issued ID and a photo of yourself holding a handwritten note with the exchange name and date. In certain instances, you might be asked for additional documents, such as a utility bill.