Deja vu?: Vircurex exchange halts withdrawals

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

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

“On 24th March 2014we will be freezing the current BTC, LTC, TRC and FTC accounts, then performthe below distribution of the available coins and reenable deposits andwithdrawals,” a statement on the site read. “This action will alsorequire 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 onTwitter.

“Vircurex has been operating as fractional reserve for sometime, and due to arun 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 largefund withdrawals in the last weeks which have lead to a complete depletion ofour cold wallet balance and we are now facing the option of either closing thesite with significant unrecoverable losses for all or to work out a solutionthat allows the exchange to continue to operate and gradually pay back thelosses.

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

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

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

?    3. We'll take the currentavailable cold storage balance and distribute it based on the below describeddistribution logic.

?    4. Monthly we will take the netprofit of the exchange and credit back that amount distributed to the usersbased on the described distribution logic.

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

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

 

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