Ex-customers sue Vircurex due to frozen funds

Around $50 000 000 of Vircurex users' founds are still frozen 
15 January 2018   185

Former clients sued the Vircurex crypto exchange four years after it was subjected to hacker attacks. This is reported by CoinDesk.

In a lawsuit filed with the US Federal District Court of Colorado, a former Vircurex client accuses the exchange of breach of contractual obligations, property misappropriation, fraud and illegal enrichment. The lawsuit says that after th exchange froze the withdrawal of funds due to lack of reserves, the funds were reimbursed to only a few clients. At the moment, $ 50 million is on frozen accounts.

According to the submitted claim, the exchange continues to work and within the last four years allowed its clients to make deposits.

In 2014, the stock exchange declared that it was practically insolvent, because lost a serious part of the reserve funds. According to the lawsuit, part of the losses are accounted for "two deliberate hacker attacks, which the stock exchange was exposed in mid-2013." Their contribution was made by customers who withdrew significant amounts from their accounts shortly afterwards.

As a result, Vircurex froze the withdrawal of funds in Bitcoins (BTC), Litecoin (LTC), Feathercoin (FTC) and Terracoin (TRC), later announcing that it would begin paying out frozen funds at the expense of future profits.

The lawsuit says that Vircurex refunded only small amounts and only a few clients, while a significant portion of the funds still remain with the exchange. The last time Vircurex sent funds to its customers in January 2016.

In addition, plaintiff Timothy Shaw states that the exchange refuses to respond to customer requests, although over the past four years, Vircurex customers have tried to contact it several times.

As detailed herein, rather than repay 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 deter accountholders from bringing suit to recover the Frozen Funds, and efforts to ultimately attempt to vanish without a trace.

Lawsuit against Vircurex

mong the actions that Vircurex tried to prevent the claim - a statement that the company is registered in Belize (although it is not so) and may be located in Beijing. The lawsuit notes that in fact the company is located in Germany. However, it was not registered in any jurisdiction, which means that no state recognizes it as an official company.

Bank of China Filed a Patent to Scale Blockchain Systems

Bank of China has filed a patent application for a process able to scale blockchain systems  
23 February 2018   108

According to a document released by China's State Intellectual Property Office (SIPO) on February 23, the application was invented by Zhao Shuxiang and first submitted on September 28 last year.

The application states that instead of letting a new block store transactions from its previous one, a data compressing system could be used to pack transactions from multiple blocks into what the patent calls a "data block."

For example, when the system receives a request to compress transactions from block 1 to 1,000, it causes a new data block to be formed and temporarily hosted on a different storage system. Then, the system will run the packed data through a hash function with a hash value. After that, the compression system will attach labels in order to identify blocks on the blockchain.

With the use of the described method, the patent claims a reduction in the amount of the data stored in new blocks as transactions mount in a blockchain while ensuring that data from all previous transactions will still be tamper-proof and traceable.

At the moment, the patent in the review process.