Vircurex Faces Class-Action Lawsuit

Cryptocurrency worth 50 million USD remains frozen at the exchange.

A class-action lawsuit has been filed against cryptocurrency exchange Vircurex, because it has been closed for several years and still hasn’t given its customers back their money.

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Founded in 2011, Beijing-based Vircurex was one of the earliest cryptocurrency exchanges – according the Merkle, it was “responsible for giving Bitcoin some of its value.” It became popular because it offered interest to customers who held more than one cryptocurrency.

In March 2014 it announced that it was freezing withdrawals as it did not have the funds to support them. The exchange found itself light on money partly because of two major hacks in 2013 (one of which resulted in the loss of 1454 BTC, 225,263 TRC and 23,400 LTC), and partly because of higher than average withdrawal requests as a result of the Mt. Gox fiasco.

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At the time, the exchange informed customers that it had a choice between closing down entirely and saying goodbye to the lost funds, and freezing the remaining currency in order that it would be able to pay customers back gradually. “We have obviously chosen the latter,” it assured them. “All users will eventually receive their funds, though the timeframe depends on the monthly volume available.”

However, the last payment from the exchange took place in January 2016. Two years on, customer Timothy Shaw is suing the exchange, or more specifically German founder Andreas Eckert and unknown Chinese national “Defendant Doe”, in Colorado District Court.

The complaint reads: “As detailed herein, rather than repay the Frozen Funds, Defendants took steps to string along Plaintiff and the Class with deceptive statements and false promises, and made efforts to cover their tracks and create impediments designed to deter accountholders from bringing suit to recover the Frozen Funds, and efforts to ultimately attempt to vanish without a trace.”

According to the filed complaint, 1,666 BTC, 124,763 LTC, and 78,782 TRC remain frozen, with a combined value of 50 million USD.

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