MTGox, the biggest bitcoin exchange platform by volume, has temporarily shut down after a Sunday night breach resulted in the theft of $9 million worth of bitcoins.

MTGox, the biggest Bitcoin exchange platform by volume, has temporarily shut down after a Sunday night breach resulted in the theft of nearly $9 million worth of Bitcoins.

Bitcoin is a decentralized electronic currency founded by a Japanese programmer in 2009. Instead of being regulated by a central monetary authority, the Bitcoins are underwritten by a peer-to-peer network and all transactions are logged in a public database.

The MTGox breach caused the value of Bitcoins to crash from $17.50 on Sunday night. The exchange will re-open on Tuesday morning, Japan time, at $17.50, MTGox owner Mark Karpeles wrote in a blog post.

"Apart from this no account was compromised, and nothing was lost. Due to the large impact this had on the Bitcoin market, we will rollback every trade which happened since the big sale, and ensure this account is secure before opening access again," he wrote.

Supposedly the database originated from a Hong Kong-based IP address, possibly belonging to one of the exchange's auditors whose computer system was compromised.

A rival Bitcoin trading exchange founder says the MTGox crash points to the need to legitimize Bitcoin exchanges.

"The currency works, the problem is with negligent exchanges," said Amir Taaki, co-founder of the London-based Bitcoin Consultancy and operator of an emerging Bitcoin exchange, Britcoin.co.uk.

"Having a legal status for Bitcoin and a regulatory framework would mean that merchant sites, including exchanges, would be accountable and liable," he said. "The negligence which occurred at MT Gox would never have reached the level it did."

Taaki said legitimizing exchanges would give Bitcoin the confidence needed to transcend from a niche currency to a legitimate monetary system.

"It's important now to go forward with legalization even if you don't agree with laws," he said.

The BritCoin exchange, for instance, is awaiting an application for regulation by the UK's Financial Services Authority.

"We have a recorded history of all transactions and are happy to open our books to the proper authorities," Taaki said. "Showing that indeed all deposits are accounted for and that the KYC (Know Your Customer) laws are followed will give us the credibility and the confidence our users deserve."

Last Friday, Symantec that appeared to target Bitcoin users.