Deja vu?: Vircurex exchange halts withdrawals

“On 24th March 2014 we will be freezing the current BTC, LTC, TRC and FTC accounts, then perform the below distribution of the available coins and reenable deposits and withdrawals,” a statement on the site read. “This action will also require us to delete all open sell orders for BTC, LTC, FTC and TRC.”

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Deja vu?: Vircurex exchange halts withdrawals

It looks as if another cryptocurrency exchange has stopped all withdrawals, though the exchange in this case is considerably smaller than Mt. Gox.

Vircurex, an exchange that handles Bitcoin, Litecoin, Dogecoin and Feathercoin, among others, announced drastic measures over the weekend in the face of apparent insolvency.

“On 24th March 2014 we will be freezing the current BTC, LTC, TRC and FTC accounts, then perform the below distribution of the available coins and reenable deposits and withdrawals,” a statement on the site read. “This action will also require us to delete all open sell orders for BTC, LTC, FTC and TRC.”

 

Run

BitPay’s Ryan X. Charles echoed the company’s announcement last night on Twitter.

“Vircurex has been operating as fractional reserve for sometime, and due to a run is now ending withdrawals,” he tweeted.

 

Next Steps

To its credit, Vircurex appears to be a bit more forthcoming than Mt. Gox in how it is handling its problems:

“Unfortunately we had large fund withdrawals in the last weeks which have lead 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.

“We have obviously chosen the later and hence are going to do the following:

?     1. We will introduce an additional balance type called ‘Frozen Funds.’ Funds in this balance type cannot be used to trade or withdraw. Those are the balances that the exchange will gradually pay back and hence transfer back to the available balance over time.

?     2. We will move all current balances for BTC, LTC, TRC and FTC to the ‘Frozen Balance,’ i.e. your balance will be set to 0.

?     3. We'll take the current available cold storage balance and distribute it based on the below described distribution logic.

?     4. Monthly we will take the net profit of the exchange and credit back that amount distributed to the users based on the described distribution logic.

The freezing of the balances is a one-time action, it does not affect future deposits in any ways.

Keep an eye on CoinTelegraph for updates on this story as it develops.

 

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