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Vircurex Exchange Frozen Accounts Fraud Class Action

Vircurex was founded in 2011 as an online exchange where users could deposit US dollars and Euros to buy, sell, and exchange digital currencies. The complaint for this class action claims that on March 24, 2014, the company froze users’ accounts by preventing them from withdrawing Bitcoin (BTC), Litecoin (LTC), Terracoin (TRC), and Feathercoin (FTC).

The class for this action is all account holders on the Vircurex Exchange who have frozen funds and who are being harmed by the defendants’ actions.

Vircurex’s website currently says it is incorporated in Belize, but the complaint claims that investigations have turned up no such records, or records of incorporation anywhere. The company has also claimed to be in Beijing, China, but some indications point to Germany.

Two additional defendants are Andreas Eckert, a founder of Vircurex, whom the complaint claims also goes by the online name of Kumala; and an unknown person, a co-founder or partner of Eckert whom the complaint claims may be Chinese.

The complaint alleges that Vircurex was not incorporated when it set up its exchange in 2011, and that it was still not incorporated on February 2, 2013, when it said it would “go public” and issue 45,000 shares. It conducted its public offering on cryptostocks.com, a website that turns out to be owned by Eckert.

On March 24, 2014, Vircurex announced that it had been hacked twice in mid-2013, and as a result, it would have to freeze accounts holding BTC, LTC, TRC, and FTC. The announcement claimed that Vircurex would “perform the below distribution of the available coins and reenable deposits and withdrawals.” It claimed that Vircurex would cover the losses from its net income and outlined a plan for monthly distribution that would pay off total amounts in the largest and smallest accounts first.

On May 5, June 8, July 15, and August 20, 2014, and January 3, 2016, Vircurex provided updates with figures, claiming that payments had been made to accounts. According to the complaint, no further updates were provided and the defendants have not answered inquiries about the remaining frozen accounts.

The complaint also alleges that a list of Terms were added to the company’s website, but only after the freezing of the accounts. According to the complaint, these terms limit the defendants’ liability and make it more difficult for users to pursue legal action.

The complaint alleges breach of contract, conversion, constructive fraud, and unjust enrichment.

Article Type: Lawsuit
Topic: con

Most Recent Case Event

Vircurex Exchange Frozen Accounts Fraud Complaint

January 10, 2018

Vircurex was founded in 2011 as an online exchange where users could deposit US dollars and Euros to buy, sell, and exchange digital currencies. The complaint for this class action claims that on March 24, 2014, the company froze users’ accounts by preventing them from withdrawing Bitcoin (BTC), Litecoin (LTC), Terracoin (TRC), and Feathercoin (FTC). It claimed that two hacks had depleted its funds. Although the company claimed to be slowly repaying the accounts from its income for some months, it has since ceased communication with account holders.

virutal_coin_holders_complaint.pdf

Case Event History

Vircurex Exchange Frozen Accounts Fraud Complaint

January 10, 2018

Vircurex was founded in 2011 as an online exchange where users could deposit US dollars and Euros to buy, sell, and exchange digital currencies. The complaint for this class action claims that on March 24, 2014, the company froze users’ accounts by preventing them from withdrawing Bitcoin (BTC), Litecoin (LTC), Terracoin (TRC), and Feathercoin (FTC). It claimed that two hacks had depleted its funds. Although the company claimed to be slowly repaying the accounts from its income for some months, it has since ceased communication with account holders.

virutal_coin_holders_complaint.pdf
Tags: Cryptocurrency, Fraud