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Indeed, Poloniex is increasingly demonstrating their incompetence. If they have lost access to their cold storage then they are operating a fractional reserve much like mtgox did prior to its collapse! If this is indeed the case, there should be no intervention - they should live with their losses; decentralized exchanges should not bail out centralized exchanges!

they have a massive amount of supply locked up...

Yep, something in the range of 300m BTS.

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