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Business & Finance

Ignoring Customers is Costing Poloniex a DOJ Investigation

For the past couple of months, the social media accounts of Poloniex, one of the largest crypto exchange in the world, has been flooded with complaints stating how customers are unable to access their accounts. Poloniex has huge trading volumes but the public opinion regarding Poloniex might force the investors to think twice before using it.

In the world of crypto currency one needs to bear in mind that the state intervenes once the damage is done. Hence, right after the complaints were reported, the Department of Justice and Investor Protection Unit, contacted the users of Poloniex. Investor Protection Unit (IPU) comes under the Fraud and Consumer Protection Division. Both units are responsible for protecting the public from fraud and different types of white-collar crimes.

Many account holders also accuse Poloniex of ignoring their complaints about stuck deposits. One user of Poloniex said:

It seems I’ve joined the ranks of countless users who have a missing / “stuck” deposit – one of those where every block explorer shows your funds in your Poloniex-sanctioned deposit address, sitting politely with 400 thousand million confirmations, while your account never actually reflects said funds….

Furthermore, the Department of Justice and Investor Protection Unit confirmed that they have been contacted by a number of Poloniex users. However, they are not willing to disclose any details regarding this case because it might have an impact on the investors who are planning to withdraw their investments.

They stated:

While we cannot comment on the status of open investigations, we can confirm that a number of cryptocurrency investors have complained to our office about frozen accounts and poor communications with cryptocurrency exchanges that have hindered the investors’ ability to make withdrawals of cryptocurrency in a timely fashion, if at all. This can be problematic for investors who are seeking to withdraw their investments and are unable to do so within a timeframe that permits them to get the price they seek.

While the authorities are willing to help the customers, one cannot ignore the fact that last year in 2017 a number of Poloniex users were facing withdrawal issues as well. However, most of these issues were mainly because people were trying to withdraw multiple currencies at the same time.

Cryptocurrency exchange, like Poloniex has a security feature which states:

The vast majority of customer deposits are stored offline in air-gapped cold storage. We only keep enough online to facilitate active trading, which greatly minimizes risks and exposure.

However, the number of complaints that are being lodged against Poloniex highlights their performance as a whole. Users are unable to access their accounts or make any withdrawals, which means that its claim of “facilitating active trading” is no longer valid. Customer support is the actual bone of contention for people using Poloniex as their complaints are hardly addressed. One reason behind such act of ignorance can be because of the intense pressure that every exchange has to go through. The industry itself is expanding hence every exchange is in a constant rift and competition with one another. Poloniex is also struggling to deal with this phenomenal demand while keeping up with expansion.

Poloniex needs to identify its strengths and weaknesses before any other exchange takes its place in the market. It is considered as a powerhouse of exchange yet when such criticism is raised, it always proves to be beneficial for its competitors.

Poloniex needs to address the complaints as many new exchanges are coming up hence the actual need and importance of Poloniex might fade away with time. Whether Poloniex takes this criticism in a positive manner and comes up with efficient solution or they continue to ignore the complaints lodged against them, is a very important factor that would have an impact on its overall position. Only time can tell whether Poloniex can easily get away with such complaints or not. The case is being investigated by Delaware authorities.

Hiram Nadeem

Hiram is a teacher and media sciences graduate with focus over finance news. Contributes to BlockPublisher with fintech news and sometimes, her opinions. Email: editor.news@blockpublisher.com

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