Would be nice to have someone Chinese check it, but there appears to be a new post (from 24/2) on their weibo site:

在各方的帮助下，通过区块分析，我们已经查清盗取的部分资金流向，正在联系相关服务平台协助调查。后面的追查仍然会非常艰辛，但是我们会继续努力。我们正在与各方合作通过一切可行的途径补偿用户。即使资金无法追回，我们也会准备全额赔付的方案。我们将很快开通CNY提现。再次感谢各位的鼓励和支持。 

Google translate:
With the help of the parties , through the block analysis, we have to identify the part of the flow of funds stolen, contact the relevant service platform is to assist the investigation. Traced back will still be very difficult, but we will continue our efforts. We are working with the parties by way of compensation for all possible users. Even if the funds could not be recovered, we will prepare the full amount of the program. We will soon open CNY withdrawals. Once again, thank you for your encouragement and support.

So no new news about withdrawals, just a reiteration of their previous posts.

This is a huge development for SuperNET, Nxt and crypto as a whole. If we can move a decent proportion of trading onto InstantDEX it will be beneficial for everyone. Very exciting times.

BTER wanted to rollback. Nxt community voted decisively against it. BTER eventually paid 400 BTC to regain 43 million NXT.

Don't worry, it was a hypothetical question. They're not selling alts, to my knowledge. It just wouldn't work, for the reasons above.
And I don't see them making 7k BTC from any sale, either. Maybe 2k if they're lucky.

Ok, I stand corrected. They have a few bitcoins. What are they going to do, offer them on a 'first come, first served' basis? What they have (~160) is about 2% of what they need to pay depositors.
And selling alts to pay for BTC to give back to those who lost BTC is a world of problems. Even if it isn't illegal or unethical, you can't sell such large amounts of illiquid alts without crashing the market, thereby 1) making it impractical and almost pointless, since you don't get the BTC you need, and 2) really annoying the alt depositors who just got their coins stolen by you because you got someone else's BTC stolen, and 3) really annoying the coin communities whose cryptos have just crashed in price.
Just not that simple for BTER.

All their bitcoin were hacked. What would they have for you to withdraw?!

InstantDEX, any day now. Built on top of NXT AE and Multigateway, but near-realtime. Should be in beta very soon.

Yes. Looks like they took shortcuts and got burned.

Define 'secure'. They are there, they have not been stolen. Whether or when they will be released is another question. BTER have said they will start enabling withdrawals in the next week or so. We will see.

Google translate on their Weibo page suggests that the hacker compromised the mechanism for refilling the hot wallet from the 'cold', allowing them to empty it.

InstantDEX will launch in beta on Friday. Distributed near-realtime exchange. Should solve a few problems.
Crypto is supposed to be decentralised: that's the point. You don't solve the problems of centralisation by created better centralised exchanges.

Brilliant!

Different situation. The hacker needed BTC because you can't sell 50m NXT without crashing the market. He settled for much less of a liquid currency.
In this case, he stole BTC. Unless they have a lead on his id, there's nothing to negotiate.
Alts are still there, in their cold wallets. What becomes of them...? Haircuts for all customers, release of all funds, gradual withdrawals to avoid panic and to maintain trading - who knows?

http://bitcoinblogs.net/bter-not-alone-other-bitcoin-exchanges-go-silent/?utm_source=twitterfeed&utm_medium=twitter&utm_term=%23bitcoin+%23bitcoinmining+%23howtominebitcoins
CCEDK also got DDOS'ed. There may have been others.
It doesn't absolve them of providing proof. But it's an interesting twist.

It's really impossible to know. My impressions so far (based on the NXT hack and impressions of the Bitbay thing from people I trust) have been that they have been incompetent, naive and a little too easy to push around rather than downright dishonest. What they do to make good on this will be telling, though the fact is they just can't cover $1.75 million.
The fact that a bunch of other exchanges were hit and BTER was first makes it harder for me to think it was all down to the management there (rogue employees is entirely another matter).

Remember the context of ~5 other exchanges being hacked in the same weekend.
'Cold wallet hack' is likely just code for 'we got lazy and didn't secure our BTC properly'. Could be an inside job, of course, but all the other exchanges getting hit? Looks like a coordinated attack.

Thanks for the coding update!

Latest I've seen is after Chinese new year, which is 19th February (tomorrow).
So we'll see: who will be the first to release, SuperNET or BTER?

EDIT: depending on how you interpret it, that could mean new year itself or the new year holiday, which could last a full week, so it would be sometime after 26th.

You'd think so, wouldn't you?
But something tells me that some people will still trust them enough to trade there, and keep their coins there.
BTER's like a cat. 9 lives. We'll see if this was the 9th or not.

 
Thank you Mr. 777.

It's likely that BTER's 'cold' wallet was lukewarm at best. If it really was set up properly, then an inside job looks even more likely. Could have been a rogue employee or someone who was given too much trust.