Vircurex becomes insolvent

More bad news concerning cryptocurrency exchanges: Vircurex has announced it will freeze all current BTC, LTC, FTC and TRC balances. This means they are now effectively insolvent.

Following a series of incidents that resulted in a loss of coins, Vircurex has announced the following:

In preparation of the following, we have with immediate effect stopped the possibilities to withdraw BTC, LTC, FTC and TRC. All incoming deposits will also not be credited to the users accounts for the time being. 

  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 exhchange and credit back that amount distributed to the users based on the described distribution logic.

Initially, Vircurex had planned to cover the losses from its income, but they also state: “large fund withdrawals in the last weeks which have lead to a complete depletion of our cold wallet balance.”  The latter forced them to take drastic measures.

To summarize; Vircurex is no longer able to meet its obligations. In an attempt to fix this, they are freezing the obliagtions and plan to meet these with their potential future profits. This means that they are now effectively insolvent. Regulation would normally force them into bankruptcy, but proper regulation is not yet in place. The best advise for anyone still able to access their balances at Vircurex would be to withdraw their funds immediately. Their plan is a gamble on future profits, and there is no guarantee that other balances won’t be affected either.

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