Poloniex is a cryptocurrency exchange that has been in the market for years, and it has gone through several changes during that period. Since the internet doesn’t always have the latest and most up-to-date information regarding crypto exchanges, we have taken the initiative to provide you with the most accurate information on Poloniex exchange, including issues regarding its verification process and other business practices.
In this guide, we will shortly cover Poloniex’s history and provide all you need to know in order to start trading on the platform, including the time it takes to verify your account.
About the Poloniex Exchange
Poloniex is currently based in Seychelles, an offshore island country in the east of Africa but the crypto exchange conducts business around the world in many countries. Poloniex is largely unregulated and doesn’t support fiat-to-crypto or crypto-to-fiat purchases and withdrawals directly. It is still 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 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 doesn’t require customers to complete identity verification in order to trade on their platform. All customers are automatically granted level 1 verification status once they sign up to Poloniex and can start depositing, trading and withdrawing crypto immediately. Identity verification is relatively simple if you want to up your account level and you are not required to present an official ID. Poloniex users with level 2 accounts can withdraw larger daily amounts.
The Poloniex cryptocurrency exchange was launched in the United States back in 2013 and the trading platform 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, most of the cryptocurrencies on offer were underdeveloped projects or outright scams (and only three of them remain today, including Bitcoin, Dogecoin, and Litecoin), 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 back in 2014. The trading platform used an unorthodox method to protect its liquidity, socializing the losses (deducing all Bitcoin balances in the platform) in order to prevent customers from leaving the exchange. Poloniex exchange paid back the customers their lost funds in a few months.
In 2017, Poloniex listed tens of 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 regarded this as an expensive purchase, as Circle not only paid 400 million dollars for Poloniex but also had to shell out 10 million dollars in fines to settle an SEC investigation that found Poloniex violated US regulations.
Circle implemented identity verification to the Poloniex trading platform in order 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, and many customers took to the internet to complain about the slow updates to their verification status. In the end, 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 tenure as a Circle subsidy, currently, you don’t have to complete identity verification to trade on the platform.
Back in 2017, when Poloniex made KYC verification a necessity, all Poloniex customers had to complete identity checks in order to be able to withdraw their assets from the trading platform. This caused a massive headache for many traders, as they weren’t able to access their assets.
Since Poloniex is no longer based in the US, it doesn’t do KYC checks or enforce identity verification. You only have 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 account entitles you to margin trading on the platform and increased withdrawal limits. You can up your account level to 2 simply by submitting a government-issued ID, and a photo of yourself holding a note with the date of the photo and the name of the trading platform. You may also be asked for 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 hold-up, you should consider contacting 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, though hackers who stole from another platform were able to cash out through Poloniex before, leading to criticisms that Poloniex doesn’t have good security measures.
Poloniex is mainly 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 trending 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 cash, as well as several others, was removed.
Deposits and Withdrawals
Poloniex is mainly a crypto-to-crypto exchange. That 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 in order 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, 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, depending on whichever is greater).
Poloniex also applies trading fees on your transactions. Trading fees vary depending on your monthly trading volume and your 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. That means it could be quite expensive to buy Bitcoin and other altcoins with fiat currency on Poloniex.
A Few Words Before You Go…
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, and you can start trading cryptocurrencies on the platform right after signing up with your email.
However, if you want to be able to deposit and withdraw fiat from the exchange, you need to verify your identity through Simplex. The identity verification process on Poloniex is quite straightforward, as you only need to present a government-issued ID and a photo of yourself holding a handwritten note that spells the name of the exchange and the date of the photo submitted. However, you might be asked for additional documents, such as a utility bill, in certain instances.