Vircurex Hit with Fraud Class Action Over Freezing Cryptocurrency Exchange Users’ Accounts in 2014

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A proposed class action lawsuit filed in Colorado seeks answers from defendant Vircurex after the all-but-defunct online digital currency exchange host in March 2014 reportedly froze users’ accounts by disabling the ability to withdraw Bitcoin (BTC), Litecoin (LTC), Terracoin (TRC) and Feathercoin (FTC). The 25-page complaint notes Vircurex and its co-defendants in the litigation last provided an update to Vircurex users in January 2016 saying “1,666 BTC, 124,763 LTC, and 78,782 TRC” remain frozen. 

The complaint explains that Vircurex, after experiencing two supposed hacks to its cryptocurrency exchange in mid-2013, told users the following March that it was “nearing insolvency” and no longer had enough digital money to cover all of its accountholders currencies. With this announcement, the lawsuit says, came the exchange freeze and a promise from Vircurex that it would repay users’ inaccessible money “from their reserve funds and future profits from operating the exchange.”  

More than four years later, users have yet to see any refunds from Vircurex, the plaintiff says. From the lawsuit: 

“As detailed herein, rather than repay the frozen funds, [the defendants] took steps to string along [the 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.”

 The plaintiff alleges the defendants have effectively stolen money from members of the proposed class and continue to operate an illegal online currency exchange with impunity.