DigiByte delisting sparks uproar - OhNo "WTF" Crypto

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DigiByte delisting sparks uproar

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A public Twitter spat between Poloniex and DigiByte has led to the coin being delisted from the exchange, and galvanized a protest with the hashtag #StandWithDigiByte.

The controversy began when DigiByte founder Jared Tate sent a volley of tweets on December 5th. He spoke out against what he alleges is an inappropriate relationship between Tron and Poloniex, calling Tron a "blatant con job", and claiming that "Poloniex has turned into a $TRX shill factory after making off with US customers sensitive data."

Such criticisms are fairly common in the rough and tumble of Crypto Twitter, however, soon afterward Poloniex made an extraordinary move - the exchange tweeted that "after careful review" the exchange had decided to delist the DigiByte token.

Back in the spotlight

Poloniex, which once dominated the majority of the altcoin trading market with Bittrex, was sold to Goldman Sachs-backed Circle after the altcoin mania subsided in early 2018. The exchange then fell from prominence as the bear market kicked in and traders moved to Binance.

On November 12th, Tron founder Justin Sun admitted on Twitter that he was one of several investors that would be spending $100 million on the redevelopment and expansion of Poloniex, while reportedly still allowing the exchange to run 'independently.'

This independence was soon called into question after a quickly deleted tweet called on Poloniex traders to buy Tron, suggesting that Sun's behind the scenes influence might be shaping the exchange's future.

At the same time, Poloniex experienced customer backlash when it began charging fees to US customers that failed to withdraw assets stored on the platform and threatened to turn these assets over to the US government to comply with regulations.

That personal know-your-customer data should be in the hands of these new Asian investors proved too much to stomach for DigiByte founder Jared Tate. In a series of tweets, he called KYC "government-sanctioned identity theft," and said he was extremely upset that his friend’s and family’s sensitive personal data had fallen into "the hands of [Poloniex].”

In response to his concerns, Poloniex published a terse tweet —making the professional admission that all US customer data is "preserved by Circle," and adding what appears to be personally motivated retribution.

"BTW, after careful review, we decided #DigiByte is not qualified for our listing standard. We will delist $DGB soon. Details to be announced," said the tweet.

#StandWithDigiByte

The detailed justification for the delisting has yet to materialize, leaving Poloniex customers struggling to determine exactly why DigiByte has suddenly failed to meet the listing standards.

On the Poloniex website, these standards are described as a preference for "open protocols," governed by "rational market participation," neutrality and the welcoming of "all legitimate assets."

But as several commentators have pointed out, DigiByte is arguably a more open protocol than Tron — a fact recognized by Poloniex itself in the early days when it hired a professional cryptographer to review the Proof-of-Work cryptocurrency.

The sudden change of stance from Poloniex suggests the delisting might be either a knee-jerk reaction to criticism or a deliberately contentious marketing stunt, which as Bitcoin developer Udi Wertheimer pointed out, has already succeeded in making Poloniex "everyone’s favorite topic."

And, if the stunt was a marketing maneuver designed to help reestablish Poloniex, Sun could hardly have chosen a more contentious target. Though several cryptocurrency leaders have pointed out problems with Tron, Tate is known for his outspoken views on centralized exchanges.

The self-styled mouthpiece for decentralization had a run-in with Binance in October 2018 after DigiByte won a public listing competition, and was then asked to pay a whopping $300,000, or three percent of the token’s total supply, to be listed on the exchange. As DigiByte brand ambassador Josiah Spackman pointed out, these resources are simply not available from a truly decentralized coin without a large pre-mine.

Nevertheless, despite tangling with some of the biggest names in cryptocurrency, DigiByte continues to survive, if not prosper.

In an interview after the dispute, Spackman said Poloniex only accounted for one percent of DigiByte trading volume, and the controversy has already caused more exchanges to contact him wanting to list the coin.



OhNoCrypto

via https://www.ohnocrypto.com

Kieran Smith, Khareem Sudlow