Vircurex froze withdrawals

Chinese exchanger of digital currency Vircurex announced the temporary suspension of all operations. Freeze touched on all transactions using Bitcoin, Litecoin, Feathercoin and Terracoin. The reason is that exchanger no longer has the reserves to cover customer requests.

The situation is reminiscent of what happened with Mt.Gox. Early in January last year became known about the problems of Vircurex. Exchanger was hacked twice last year. Attackers were able to access to the wallets of customers, and this has led to the theft of thousands of Bitcoin. Vircurex pledged to cover its users’ losses via its own income. Due to «large fund withdrawals in the last weeks», Vircurex claims it has taken the above actions to prevent the service from shutting down entirely.

«Unfortunately we had large fund withdrawals in the last weeks which have led to a complete depletion of our cold wallet balance and we are now facing the option of either closing the site with significant unrecoverable losses for all or to work out a solution that allows the exchange to continue to operate and gradually pay back the losses».

A message on Vircurex’s site also says it will create a new balance type called «Frozen Funds». The company maintains it won’t be shutting down. Losses will be paid back according to a «top-down/bottom-up» distribution logic, according to the site announcement. That means 50% of available funds will be used to pay the largest balance holders and the other 50% the smallest, meeting somewhere in between.

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