Hundreds of millions of dollars tied up in bitcoins were reportedly lost when Mt. Gox, the biggest exchange for bitcoin transactions, collapsed at the end of February. Since then Mt. Gox has filed for bankruptcy, a federal judge in Chicago has frozen the U.S. assets of its CEO Mark Karpeles, lawsuits have been filed and calls for regulating bitcoin transactions have increased substantially.

Will regulation protect the consumers spending the virtual currency and the individuals and businesses collecting bitcoins?

Related: Car chases, bankruptcy, hackers: What's next for bitcoin?

Tony Gallippi, CEO of BitPay, an electronic payment processing system for the bitcoin currency, says there's no need for new regulations.

"We already have regulation on the books that regulate banks, remittance services and financial services...the same rules...can apply [to bitcoin]," Gallippi said earlier this week at a Yahoo Finance-sponsored panel at South by Southwest conference.

But Gallippi concedes that regulators are moving too slowly to include bitcoin in the mix of regulated markets. "We need a little faster progress," he notes.

Related: Bitcoin needs to grow up if it wants to survive Mt. Gox collapse

Gallippi suggests that bitcoin users have a "multisignature address" for their bitcoin accounts so that at least two different keys are required to spend funds from those accounts. That wasn't the case when reportedly 750,000 bitcoins, worth several hundred million dollars, were stolen from Mt. Gox.

"If multisig was enabled, you could give Mt. Gox one key, you keep one key and you give a key to your friend or your wife. That way there's no possible way Mt. Gox can run off with your money because they only have one key," Gallippi explains.

Related: Bitcoin ATMs roll out as cryptocurrency faces hackers, regulation and volatility

But John Lunn, global director at Paypal, says convenience, more than security, is what consumers want and need.

"A lot of the banks have put in very secure ways to access your money...but it's so painful to use that people aren't paying with it," he explains.

But consumers will demand more security, and that, says Gallippi, will lead to self-regulation. "Regulators don't want to regulate [bitcoin] because if they do people would see it as safe. Regulators don't want to relay the message right now...They want to have the attitude 'buyer beware.' They can't do that if they also regulate, so they're kind of stuck."

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