Hi Jerry,

I had a discussion with someone else about this before, and this is what I mentioned.

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I had a think about what the issue is at Poloniex and it frightens me to think if I was correct, how deep the ramifications are.

My theory (which is just a guess)

1. Poloniex experienced a catestrophic loss of funds. This could either be through security issues or interal siphoning of funds - theft / embezzlement etc. Either way, the exchange is insolvent.

2. The exchange attempts to create a mania phase encouraging people to deposit anything and everything and then market making themselves with substantial volume that cannot be proven to be legitimate.

3. Highly inflated coins gives rise to many users with inflated portfolios, except, anyone who likely has a win from participating in these manipulated markets will find it troublesome to withdraw. At first, a few who made large wins will not be able to withdraw, then as more and more people report withdrawal issues, a systematic lockdown of funds will occur.

4. The mania phase results in large deposits which then can no longer be withdrawn. This gradually fills the 'hole' which the exchange created by market making each of their markets, and most likely front running a lot of the 'pump' with money not belonging to them ( probably from the capital base of the users )

5. Effectively, the inflated price of the markets there, are only held up by the fact that fewer people can actually 'realise' profit because it's not BTC when it's just a number on the exchange. It's BTC when you can withdraw it, and see it in your own wallet - an action which cannot be taken by an increasingly large base of users.

For me, I had a very substantial amount of money on Poloniex, none of which I have been able to withdraw since over a month ago. It has been complete silence from support despite multiple attempts to get any updates on why my withdrawals have remained in awaiting approval for over a month.

To answer your question in lamens terms :

Someone is willing to pay a premium over nominal market prices of SBD because it attracts people to deposit SBD to sell for BTC, but the BTC cannot be withdrawn. Poloniex could literally place orders at ridiculous prices with phantom btc.

I would be very surprised if I ever saw my money there again. I will assume it is lost and treat it as an expensive lesson.
As of right now, I will probably take advice from another friend on Steemit and avoid centralised exchanges altogether.