Prominent bitcoin exchange Mt.Gox posted an update on its website on Tuesday, saying a "decision was taken to close all transactions for the time being," citing "recent news reports and the potential repercussions on MtGox's operations."
(Read more: Bitcoin's Mt.Gox disappears, insolvency feared)
The website went dark on Tuesday and its chief executive told Reuters that the business was "at a turning point." Mt.Gox halted withdrawals earlier this month after detecting what it called "unusual activity."
"We will be closely monitoring the situation and will react accordingly," the website said.
(Read more: Mt.Gox CEO says bitcoin exchange at 'turning point')
Six bitcoin exchanges distanced themselves from Mt.Gox in a statement, calling the exchange's activities a "tragic violation of the trust of users of Mt.Gox."
Not a 'death knell': Official
New York state's superintendent of financial services Benjamin Lawsky weighed in on the bitcoin turmoil.
"I think that the question is, is this a continuing of the shaking out of a fledgling industry? My gut is that's part of what you're seeing. It's a new industry," Lawsky told CNBC. "It's obviously not regulated in any significant way yet...It may be a significant bump in the road, but I don't think they're going away or it's any kind of death knell."