QUIET WITHDRAWL: many legitimate business accept Bitcoins but their popularity with online fraudsters means others would celebrate their demise.

The world's most popular virtual currency, Bitcoins, has suffered a blow with an organisation set up to promote the currency among non-profits suffering financial difficulties.

But one non-profit, Kiwi cyber safety organisation Netsafe, is not shedding any tears.

Bloomberg reported the World Bitcoin Association had filed for bankruptcy protection in New York.

The organisation was founded in Zurich in June with the goal of uniting non-profit Bitcoin organisations around the world and increasing the adoption of Bitcoins and other "crypto currencies".

The value of a Bitcoin peaked at more than US$1200 (NZ$1623) late in 2013 but the virtual currency has now fallen to less than US$400.

Last year, the currency gained notoriety as the favoured currency for internet criminals who install "ransomware" to scramble files on people's computers and then demand payment to unlock them.

Martin Cocker, chief executive of cyber-safety organisation Netsafe, said that was because Bitcoin transactions were hard to trace.

Cocker said he personally would not be sad to see the demise of the virtual currency. "Netsafe sees a lot of complaints here about Bitcoins being used as a payment mechanism for scams and I think whilst there are benefits in terms of innovation in the financial community, something which is as untraceable and uncontrolled as Bitcoins is not necessary the ideal solution.

"It is something we have only seen associated with negative activities. That's the nature of Netsafe's work, but that is what we have seen," he said.