GOLDMAN-BACKED STARTUP CIRCLE BUYS MAJOR CRYPTO EXCHANGE POLONIEX

Goldman Sachs-backed cryptocurrency startup Circle has acquired digital token exchange Poloniex, Circle said, as it aims to cement its position as one of the leading players in the booming market.

Neither of the Boston-based companies disclosed the value of the deal that gives Circle control of a marketplace it said sometimes has daily volumes of more than $2 billion, with around 70 different digital currencies and tokens traded.

Fortune magazine said the deal was worth $400 million, citing a person familiar with the matter.

“We’ve been really impressed with what they have been able to pull off,” Circle co-founder and CEO Jeremy Allaire said.

“They defined what originally people thought of as‘altcoin’ exchanges,” he told Reuters. The term altcoin describes newer cryptocurrencies than the more established bitcoin and ether.

Circle operates an app-based peer-to-peer payment network using blockchain, the technology which first emerged as the system underpinning cryptocurrency bitcoin. It is also one of the leading players in the over-the-counter market for bitcoin trading, and is soon launching a retail-focused app for buying cryptocurrencies, Circle Invest.

One of the best-funded blockchain startups, its investors include Goldman Sachs Group Inc and Baidu Inc.

Circle’s founders said they had discussed the acquisition with all of their investors, as well as with regulators, and that the deal was closed.

The value of cryptocurrencies – as well as the number – has ballooned since the start of 2017, when they were worth around $17 billion, according to trade website Coinmarketcap, with their total value topping $800 billion in January before slipping to around $450 billion now.

There are now more than 1,500 digital currencies and tokens, Coinmarketcap said.

Source: Reuters

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