TrueCrypt is a very popular, opensource, disk encryption tool. Its very commonly used in industry and government (the parts of government that know what they are doing anyway) because most of the commercial options are known to be compromised by the US (-Crypto AG).
However, last night TrueCrypt's website posted a very odd message saying the software is compromised and warning users to switch to BitLocker. BitLocker is a joke - and no one trusts it, so this is a very weird thing to post. TrueCrypt also uploaded a new software version, version 7.2, which is the first release in 2 years. The Register installed it in a safe environment and found out that the new version does nothing - all encryption is turned off. The new version has the same warning as the website - do not use.
The TrueCrypt team are uncontactable. There is a lot of speculation in the tech media that the FBI knocked on their door, just like Lavabit, the project team chose to kill the project rather than install a backdoor for the FBI. Standard gag orders would prevent TrueCrypt from saying this directly.
TrueCrypt considered HARMFUL
It is notable that Snowden and the Guardian used TrueCrypt to evade the NSA.