Poloniex Is Officially in Trouble After Ignoring Hoards of Complaining Customers

On July 25, the Department of Justice showed its interest in Poloniex - a Delaware-based cryptocurrency exchange platform - in a rather unexpected fashion: Chief Special Investigator of the Investor Protection Unit Craig Weldon emailed a number of Poloniex users, asking them to respond if they have any difficulties with their account.

According to the Coinmarketcap database, Poloniex is currently the 30th largest crypto exchange in the world, with a daily volume trade of around $54 million and around 98 tokens available for trade.

In an open letter that D'Agosta sent to exchange users in May 2015, he revealed that Poloniex is a Money Services Business and is "Bound by the rules and regulations defined by the Financial Crimes Enforcement Network." Consequently, the exchange introduced the first signs of Know Your Customer/Anti-Money Laundering procedures: Since May 2015, Poloniex users were required to state their name and country for any withdrawals.

In December 2017, Poloniex announced that the KYC/AML procedures were going to become more rigorous, urging legacy account holders to undergo a verification processes before a deadline in order to "Avoid any potential interruptions in your ability to trade on the platform." A specific deadline was not outlined stating that it was coming during "Q1 2018." There have been no public announcements regarding the deadline ever since, while - in late May - a number of customers reportedly began receiving emails in which Poloniex asked them to verify their account within 14 days - after which the unverified accounts were frozen, leaving some customers puzzled.

Complaints were voiced even by Poloniex users who obliged to complete mandatory verification procedures: Some account holders claimed that, even after confirming their identity and receiving notifications assuring that they may now continue trading, their accounts remain blocked.

The exchange warns about data confidentiality: "Poloniex may be required to file details of Account activity to FinCEN from time to time. Poloniex may also be required to provide information to government agencies as required by law to other state or federal agencies."

Unofficial Poloniex reddit channels are swamped with various threads of alleged-user complaints over their accounts being frozen - even after submitting the required documents.

A significant amount of such account holders claim that the Poloniex support has been ignoring their complaints for weeks.

On July 9, a Reddit user PoloniexSuit shared a change.org petition against Poloniex - allegedly after contacting his attorney - urging affected customers to sign it, although only a modest 12 people have done so, as of press time.

As shown in an screenshot of said letter, Chief Special Investigator of the Investor Protection Unit Craig Weldon wrote to a broad list of individuals, asking them to contact him should they, in case, experience any difficulties with their Poloniex account.