Payment processing company Dwolla is abandoning Bitcoin. In a surprise email to its customers on Thursday, Dwolla announced that it will be phasing out its service with digital currency exchanges and Bitcoin-related businesses, citing the "uncertainty and confusion around virtual currency" as a reason to cut ties.

Dwolla will gradually pull away from digital currency businesses during the month of October. As of yesterday, only existing Dwolla users could send money to those businesses. On the 15th, the businesses will lose the ability to receive money. And on the 28th, less than two weeks later, their accounts will be suspended.

In the email, Dwolla claims that digital currency businesses comprise only 0.1 percent of merchants using its service, meaning that it won't feel much impact from their loss.

"As Dwolla gears up for a new stage of growth, we recognize that we can no longer sustain this merchant base," the company wrote. "Attempting to do so jeopardizes both of our communities' starkly different, but similarly ambitious, vision for improving payments."

The cryptocurrency had already brought Dwolla unwanted attention earlier this year. In May, the Department of Homeland Security seized $2.9 million belonging to Mt. Gox, one of the largest Bitcoin exchanges, from a Dwolla account.

Now, following the closure last week of online black market Silk Road, which used Bitcoin as its sole currency, and the arrest of its alleged founder, Ross Ulbricht, Dwolla may have decided that Bitcoin is simply too hot to handle.

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