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Goldman-backed mobile payments company acquires digital currency exchange


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Goldman-backed mobile payments company acquires digital currency exchange

Goldman Sachs Group Inc.-backed mobile payments company Circle Internet Financial Ltd. has acquired U.S.-based cryptocurrency exchange Poloniex LLC.

Terms of the deal were not disclosed, although "a person familiar with the terms of the deal who was not authorized to speak about it" told Fortune that the deal was priced at about $400 million. Poloniex, which was formed in 2014, is one of the larger virtual currency exchanges.

In a tweet, Nathaniel Popper, journalist at The New York Times, cited a slide from a confidential Circle presentation that said the SEC would "not pursue any enforcement action for prior activity."

On the slide, Circle said it has briefed the SEC on the acquisition and, following the deal's completion, will begin registering the new entity with the SEC and the Financial Industry Regulatory Authority as a broker/dealer and a licensed alternative trading system. Circle said the SEC was "very favorable" about the approach, according to the slide. The new entity will be the first regulated cryptocurrency exchange.

Circle co-founders Sean Neville and Jeremy Allaire said in a blog post announcing the acquisition that the "immediate priority" will be on addressing customer support and scale risk, compliance and technical operations. The company also intends to scale Poloniex through market expansion and localization, increasing token listings and exploring connectivity with several fiat currencies. It further plans to expand Poloniex beyond just a cryptocurrency exchange.

"We envision a robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music and literature, service leases and time-based rentals, credit, futures, and more," they wrote.