Circle acquires cryptocurrency exchange Poloniex

Circle just announced that it is acquiring U.S.-based cryptocurrency exchange Poloniex. According to Fortune, Circle is paying $400 million for the acquisition. Poloniex has been around for years and used to be one of the biggest exchanges out there — there are now many exchanges competing with Poloniex.

Circle is an interesting startup because it’s hard to keep track of what it does. The company first pitched itself as a bitcoin company that wants to make bitcoin more accessible. Circle wanted to become the PayPal of bitcoin. You could buy and sell bitcoins quickly and easily without any technical knowledge.

But that was in 2013 during the first bitcoin boom. Shortly after that, Circle called itself a social payment company, a Venmo competitor. The words bitcoin and blockchain were completely gone from the company’s website.

“We never thought of ourselves as a Bitcoin startup. The media certainly classified us that way because we were involved with the technology. From the day we founded the company three years ago we’ve focused on trying to build a new consumer finance company. And one that makes money work the way the Internet works,” co-founder and CEO Jeremy Allaire told TechCrunch’s Natasha Lomas in 2016.

More recently, Circle got back into the cryptocurrency game and came full circle.

The peer-to-peer payment service that was called “Circle” is now called Circle Pay. It also runs Circle Trade, an over-the-counter trading desk for large cryptocurrency investors and exchanges.

In other words, Circle Trade fosters liquidity between a handful of fiat currencies and cryptocurrencies. Circle Trade also powers Circle Pay behind the scene. According to Fortune, Circle Trade manages $2 billion a month in transactions and generated $60 million in revenue in just three months.

The company now wants to expand beyond those two products with Circle Invest, an easy-to-use investment app to start buying cryptocurrencies, and Poloniex, a full-fledged exchange.

Fortune also says that Circle is also working on Centre, a protocol that is going to make Alipay, PayPal, Circle and other digital wallets interoperable. And if you’re a Poloniex user, Circle says that the transition should be smooth.

Disclosure: I own small amounts of various cryptocurrencies.