Vircurex is one of the oldest cryptocurrency exchanges, and was established way before the explosion of altcoin exchanges that happened in the last few months. There was a time when the only real options for altcoin trading were btc-e, Vircurex and Cryptsy. However, today Vircurex has fallen out of favor, and not without some good reasons. A few months ago, it was hacked and was fraught with some lost customer funds. Since then, it has come up with a plan to replenish the accounts of users, but that hasn’t been going on very well either, and lots of funds still remain frozen, even as volume begins to dry up.
The promised that the account-freezing was a one-time action and wouldn’t be applicable for new deposits (obviously). Many believe Vircurex was being operated as a fractional reserve, and it doesn’t seem to get too many people in the community to like it very much. However, it has continued to operate after that one-time freeze, the idea being that it would make full the lost amounts through the fees earned.
Now, it seems like this plan might not have worked out too well, and now Vircurex is further trying to entice the community with an interest on deposits. They promise 15% of all fees collected to be returned as interest to select accounts that hold, well, basically a lot of money. Here’s their announcement:
You can now earn interest on your deposits. Every 6 hours we will pay out 15% of the earned trade fees to account holders who hold at least 1 BTC, 100 LTC, 400 PPC, 1,500 NVC, 10,000 WDC respectively. The amounts will be paid out proportionally to the total account balance. We take a snapshot every 6 hours and pay out based on the account balance at that point in time. We reserver the right change the schedule without prior announcement.
This feature is currently limited to BTC, LTC and PPC; for the next 3 months. Should sufficient interest be shown, we may extend it to other coins as well as extend the time frame.
It is a bold move for sure, but is it enough to bring back the traders who have left this exchange for others that are far more stable and have better liquidity and support and activity and less risk of accounts being frozen? Well, we’ll have to wait and see. If Vircurex is able to return all the customer funds that are frozen, it would be a strong move that might entice people back, but in order to do so, they need more trading volume to begin with. They’ve started trading BTC against the USD and EUR, but the volumes remain low. They’ve also added new markets for Auroracoin and Zetacoin as well in order to try to improve trading volume.
Personally, I have 3.78 LTC frozen on Vircurex, which is a fairly small amount that doesn’t affect me so much if I lose. I would definitely be hesitant to put more money into Vircurex at this stage for trading. However, as an exchange, I’ve used Vircurex on and off for a long time and the overall experience has been very smooth with no lags even during peak trading activity. That seems to be a secondary concern to losing your funds though.
What do you think of Vircurex? Which is your preferred altcoin exchange?