‘Being this wrong should be illegal’ — Crypto pundits slam Fed’s Kashkari

Crypto Critics Face Backlash for Misconceptions

Minneapolis Federal Reserve President Neel Kashkari has sparked controversy by asserting that cryptocurrency is primarily used for illicit activities.

At a Wisconsin Town Hall event, Kashkari claimed that "very few transactions were actually happening" in crypto, stating:

"They're not paying for goods and services using crypto [...] It almost never happens unless people are buying drugs or other illegal activities."

Kashkari's comments have been refuted by industry experts. Castle Island Ventures partner Nic Carter denounced them as "absurdly wrong" and emphasized Kashkari's influence as a top financial regulator.

Hailey Lennon of Brown Rudnick added that legitimate crypto projects implement robust anti-money laundering measures, making physical cash more commonly used for illegal purposes.

Kashkari, a long-standing Bitcoin skeptic, echoed similar sentiments from other policymakers like Senator Elizabeth Warren and Congressman Brad Sherman.

However, blockchain data contradicts Kashkari's claims. A Chainalysis report revealed that in 2023, only 0.34% of crypto transactions were linked to illegal activities, a significant decline from the peak of 1.29% in 2019.

Notably, Kashkari's comments follow a suggestion by the Federal Reserve Bank of Minneapolis to tax or ban Bitcoin to address budget deficits. In the past, he has dismissed crypto assets and CBDCs as "handwaving world salad" and likened Bitcoin to a "giant garbage dumpster."