Vircurex’s funds were lost four years since its beginning, due to hacks that were alleged and the former customers are busy suing the company for holding frozen crypto funds. A Colorado District Court filed a lawsuit. In the lawsuit that was filed, a former customer accused the cryptoexchange of breach of contract, fund conversion, unjust enrichment and fraud. The suit also explained in detail how just a few customers were able to receive their funds after the crypto exchange was forced to freeze all the withdrawals. The claimed reason was want of reserves to do so. After further investigation, it was found that all the accounts that were frozen, all put together contained a total of $ 50 million.
Over a period of four years the exchange allowed the customers to debit their investments in their firm. Even now, the exchange continues to function, says the lawsuit. In the year 2014, after its conception, it almost reported a near insolvency condition when a large part of its funds in reserves were lost in a short period of time. Yet, it continued to lure customers to continue transacting with them.
Due to this irrevocable loss, Vircurex froze bitcoin withdrawals of the customers, along with freezing other cryptocurrencies like litecoin, terracoin and feathercoin. Once the news of its loss made it in to the public domain, the company publicly made a statement that it would reimburse its customers of their shares from its own company profits, CoinDesk reported.
The lawsuit claims that minimal cryptocurrencies of small value were refunded by the exchange. The last ever time that the funds were transferred to the accounts held by the loyal customers was during the period of January 2016.
The suit clarified – “As detailed herein, rather than 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 defer account holders from bringing suit to recover the Frozen Funds and the efforts to ultimately attempt to vanish without a trace.”
One of the steps taken up by Vircurex as a defense against the law suit was its statement that it was conceived in Belize, factually which is not true, and also indicated that its roots were partially in Beijing, a statement which is yet to be confirmed. In addition, the exchange named two operators identified as “John Doe” or “Jane Doe” and another participant as Andreas Eckert.
A lot of effort was put in to trying to contact Shaw’s lawyers, which were not returned. Efforts were also made to contact Vircurex, which was again in vain. The case is under way and there are a lot of speculations about the outcomes. A lot of customers who underwent the same problem came forward to support the cause of the unfunded crypto currency to customers who remained loyal to the company in its time of hardships.