Poor Key Management
Private key leak, hot wallet
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). 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.
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