Technology pioneer John McAfee is urging spooked bitcoin investors not to panic after it emerged major banks in India were investigating the country's top exchanges.
News that trading platforms used to buy and sell cryptocurrency were potentially under threat by a financial probe led to fears the price of bitcoin could plummet. McAfee, adviser to a project called BitIndia, previously called for calm after prices crashed earlier this month.
"Again ... don't panic," he wrote to his 726,000 Twitter followers on Sunday (21 January).
"Banks in India are cracking down on accounts connected to crypto exchanges, causing the dip," he added. "But distributed exchanges are only a few months away. Impossible to crack down on."
According to media outlet The Economic Times, three sources aware of the investigation said multiple financial institutions – including the State Bank of India and Yes Bank – had found suspicious transactions linked to the accounts of bitcoin exchanges in the region.
The publication said legal action was being taken against the top 10 exchanges – including BtcxIndia, CoinSecure and Unocoin. Cash withdrawals from the accounts had been capped, it noted.
"It's a cautionary move on our part," one banker involved in the case told The Economic Times. "We are wary about the purpose for which some of these current accounts are being used."
The booming cryptocurrency market in India is largely unregulated. While bitcoin is only one type of digital money, it has gained widespread attention over the past year after spiking in value. It is traded solely online and decentralised – meaning it does not need banks to exist.
Reacting to its rise, major governments are now pondering increased legislation. Speculation about the result of these legislations were partially to blame for a huge drop in prices in early 2018.
McAfee, true to form as a bullish crypto investor, has told his followers to stay the course.
"Who cares what bottom bitcoin hits?" he said in response to one concerned follower. "It will be back in less than a month. Fiat currencies are the water. Cryptocurrencies are the floating objects. Push one down as deep as you want. It will, with certainty, rush back to the top."