Small bitcoin exchange Vircurex on the verge of collapse due to cyberattacks

Vircurex has chosen to freeze all user accounts as it teeters towards financial ruin caused by cyberattacks. The Beijing-based cryptocurrency trading post, a victim of two cyberattacks last year, began dipping into its own cold wallet to release currency — stored offline — in order to compensate users affected by the security breaches, in which “significant” losses were suffered by the company.

A small bitcoin exchange in Beijing is in trouble again after trying to earn back funds lost in two hacking incidents last year. The exchange, called Vircurex, said in a statement it would freeze on Monday cryptocurrency accounts held by its customers after large withdrawals apparently nearly drained it of funds. A tiny player, Vircurex traded just 54 bitcoins in the last 30 days, according to statistics compiled by Bitcoin Charts. By comparison, the largest China-based exchange, BTC-China, transacted more than 202,000 bitcoins in the same period. But it is the latest exchange to suffer financial problems following the collapse last month of Mt. Gox, the one-time king of the bitcoin trade, which lost an estimated 650,000 bitcoins and US$23 million in cash through poor accounting and security problems.