Bitcoin Exchange Vircurex Freezes Customer Withdrawals

Bitcoin has had a bit of a rough time the last few months. The virtual currency was soaring in popularity until one of the major Bitcoin exchanged stopped withdrawals back in February. Mt. Gox ended up filing bankruptcy and admitting it has lost tens of thousands of bitcoins. Last week Mt. Gox found 200,000 of those bitcoins in an old wallet.

Bitcoin is taking another blow as another bitcoin exchange has announced that it is freezing withdrawals. Vircurex has frozen customer accounts. Vircurex is based in China and has frozen customer accounts and is no longer allowing withdrawals of bitcoin, litecoin, and other virtual currencies.

The reason the company has frozen accounts is because it is in serious financial distress. The company was reportedly hacked two times last year and has been using cash reserves to reimburse users who were affected by the hacks.

Vircurex says that large withdrawals in the last few weeks have left the company with no cash reserves. Vircurex never said exactly how many coins were stolen in the hack. The goal of closing withdrawals is to keep funds while the company is trying to return to a better financial position. If I had money in the company I wouldn't like the idea of them trying to fix their operations with my money. A new listing in the accounts of customers will show how much of their funds are "Frozen Funds" and can't be withdrawn. The company will work to pay those funds back over time.

SOURCE: TheNextWeb