Another Bitcoin exchange platform is adding itself to the list of virtual exchanges that have imploded. Vircurex has issued a statement on its website saying that it will halt the withdrawals of digital currencies like the Bitcoin, Litecoin and others. It will freeze all user accounts beginning March 24, 2014, The Next Web reported.
In its website, Vircurex said, "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. 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. This action will also require us to delete all open sell orders for BTC, LTC, FTC and TRC."
The exchange was breached a couple of times last year which caused it to lose a lot of bitcoins. According to Vircurex, they had used their income to cover those losses and have done so to date using the coin balances held in its cold wallet. However, the substantial withdrawals that occurred in the past weeks have depleted the balance in their cold wallet. Rather than shuttering the site which would lead to losses for everyone, the company proposed a four-step solution that would enable the exchange to continue operations and pay back the losses, the statement said.
First, Vircurex will introduce another kind of balance called "Frozen Funds" which will not be used for trading or withdrawing. The balances in the "Froze Funds" will be what the exchange will pay back gradually and "transfer back to the available balance over time." Then, the current balances will all be moved to the "Frozen Balance." Third, Vircurex will use the current available balance in cold storage and distribute it using distribution logic which the exchange describes in detail in its website. Finally, Vircurex will get the exchange's net profit and "credit back that amount distributed to the users based on the described distribution logic," the statement said.
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