MT. Gox, one of the largest Bitcoin exchanges recently filed for Bankruptcy, and now another Bitcoin exchange has run into trouble, this time it is Vircurex.
Vircurex, which is based in Beijing, is smaller than Mt. Gox, the company traded in Bitcoin and Litecoin, and it has now stopped withdrawals from customer accounts.
The exchange was hacked twice in the last 12 months, and it has been using its own currency to fund its customers since the hacks.
The company has said that large withdrawals from the exchange last week, means that it now doesn’t have the funds to continue funding its customers.
Vircurex is not filing for Bankruptcy just yet, instead the company has announced that it is freezing its customers accounts, and it intends to pay the customers their full balance when it can, you can see a statement from the company below.
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 [sic] and credit back that amount distributed to the users based on the described distribution logic.
…
Distribution logic
50% of the amount will be distributed top down and the other 50% will be distributed bottom up.
Top down means: credit the amount from the largest account balance down to the smaller accounts Bottom up: credit the amount from the smallest account balance to the larger accounts.
This approach has the advantages that:
– all users will eventually receive their funds, though the timeframe depends on the monthly volume available
– new deposits and users are not penalized, thus supporting the ongoing operations of the platform
– fund withdrawals from the available funds are guaranteed, no surprises or unecessary [sic] delays
Source The Next Web
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