Exchange Review: Poloniex

Poloniex
  • Editor Rating
  • Rated 2.5 stars
  • 50%

  • Poloniex
  • Reviewed by:
  • Published on:
  • Last modified: November 4, 2016
  • Trades
    Editor: 58%
  • Funding
    Editor: 20%
  • Compliance
    Editor: 49%
  • Platform
    Editor: 48%
  • Help & Support
    Editor: 54%

Poloniex is a US-based cryptocurrency exchange that was founded in January 2014. The exchange has its headquarter in Whitefish, Montana.

Trades

Even though Poloniex does not have any active fiat markets, the exchange does offer well over a hundred cryptocurrency pairs to trade in. The liquidity on these cryptocurrency pairs is hard to determine but generally not great, given that even the most liquid pairs have bid-ask spreads starting at one percent. Trade execution fees add another 20 basis points in costs per trade. Most cryptocurrencies also cannot be traded directly. Trading Ripples for Litecoins would for example require two trades through Bitcoin, including additional trade costs. Users do get decent control over their trades, as Poloniex supports Stop-Limit orders besides normal Limit orders. As of May 2015 Poloniex also enabled margin trading/short selling.

Funding and Compliance

Without any fiat markets there is not only little to write with regard to account funding, but it typically also implied that the exchange was subject to little regulatory demands. This has recently changed when the Financial Crimes Enforcement Network (FinCEN) released new guidance with regard to Bitcoin exchanges. Any exchange may now be a money transmitter. Poloniex has complied with this and has recently registered as a Money Services Business (MSB) with FinCEN (registration number: 31000055869515) and actively maintains an Anti-Money Laundering (AML) program since May 2015. The exchange did not participate in a public Proof of Reserves audit either or offer any other form of financial transparency, despite being hacked in its first few months, weighing down on the compliance score.

Platform

One disadvantage of offering many cryptocurrencies to trade in, is that it becomes harder to keep the platform simple and easy to navigate. Poloniex could have managed this better, as it was not required, for example, to load all markets and the user chat in a sidebar on the trading screen. Overall, the platform is very crowded, but fortunately not that difficult to use.

The website of Poloniex is surprisingly not optimized for mobile platforms, which is something that would be expected from an exchange founded in 2014. The exchange does support two-factor authentication for its user’s accounts.

Help & Support

Poloniex’ FAQ does not exactly contain the content one might expect. Rather than discussing cryptocurrencies or relevant trading information, the FAQ covers coin listings and the so-called Trollbox (user chat). Information on advanced features Stop-Limit order and Margin trading can be found elsewhere, offering some compensation to the previous. The exchange also does not have much of a support desk to approach for any further assistance, as users can only leave a support ticket.

Pros

• Many altcoins to trade in
• Margin trading in altcoins

Cons

• No fiat markets
• Wide Bid-Ask spreads on most tradable pairs
• Crowded/slow design