Beijing-based virtual currency exchange Vircurex suspended withdrawals Monday as it claimed it did not have the necessary reserves to fulfill customer requests, the company said over the weekend in a statement on its website.

Vicurex said the balance freeze is a one-time action and does not affect future deposits of bitcoin, litecoin, feathercoin and terracoin in any way.

"As you may very well be aware, we had two incidents last year that led to a loss of a significant number of BTC, LTC, FTC, TRC," Vicurex said in a statement. "We had communicated at that time that we will be covering those losses from our income, which we have done so far. We had enough coin balances in our cold wallet to upkeep our platform and the positive cash flow enabled us to gradually refill the wallets.

"Unfortunately we had large fund withdrawals in the last weeks which have led to a complete depletion of our cold wallet balance and we are now facing the option of either closing the site with significant unrecoverable losses for all or to work out a solution that allows the exchange to continue to operate and gradually pay back the losses."

Vicurex went on to say it has chosen to gradually pay back the losses and outlined four ways it will do so:

1. We will introduce an additional balance type called "Frozen Funds." Funds in this balance type cannot be used to trade or withdraw. Those are the balances that the exchange will gradually pay back and hence transfer back to the available balance over time.

2. We will move all current balances for BTC, LTC, TRC and FTC to the "Frozen Balance," i.e., your balance will be set to zero.

3. We'll take the current available cold storage balance and distribute it based on the described distribution logic.

4. Monthly, we will take the net profit of the exchange and credit back that amount distributed to the users based on the described distribution logic.