Online currency firm Flooz.com has ceased operations and is to file for bankruptcy protection. Confirmation of the shutdown comes amid reports that the company was brought to its knees by credit card fraudsters.
Flooz.com sold gift certificates for hard currency which users could then spend on discounted items at Internet merchants. The company raised £35 million and spent heavily to promote its service, splashing out on billboards and TV advertising featuring the actress Whoopi Goldberg.
In a statement posted on the its Web site, Flooz.com says it was "adversely affected by dramatic changes in capital markets and the general slowdown in the economy."
According to a report in the New York Times, Flooz.com was also a victim of Internet fraud, unwittingly selling $300,000 in flooz gift certificates over the last three months to a ring of credit card thieves in Russia and the Philippines before being notified by the FBI.
The Flooz Website has been unable to process transactions for some weeks. The company had been in merger discussions with a number of companies but has been unable to find a suitable partner.
Its demise follows the suspension of operations at another high-profile Web currency casualty beenz.com, which has stopped honouring transactions and is seeking a buyer for its technology and intellectual assets.