Habbo parent company Sulake is also "reviewing its long-term plans for the Habbo Community", according to chief executive Paul LaFontaine.
As reported earlier, Sulake investor Balderton Capital has decided to dump its stake in the company after the Channel 4 report.
LaFontaine explained the decision in the following statement: "I am greatly saddened that following reports of abusing behaviour amongst a very small part of the Habbo community, we have taken the decision to mute all conversations across the site.
"We are still reviewing our long-term plans for the Habbo Community, and would like to thank our millions of loyal users fro their support at this challenging time.
"This decision has not been taken lightly and underlines the company’s continuing commitment to ensure that all our site users remain safeguarded from inappropriate behavior and conversations.
"Our internal investigation is currently on-going, but we will be sure to inform all users of further developments in the coming days and weeks.
"In the meantime, my thanks for your patience and understanding."
