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The controversial statements made by Minneapolis Fed President Neel Kashkari regarding cryptocurrencies have faced intense criticism from industry leaders. Although Kashkari claimed that cryptocurrencies are largely used for illegal activities, industry representatives and data analyses refute this view.
The Crypto Sector Criticized the Fed President's Words
Minneapolis Federal Reserve Bank President Neel Kashkari's recent statements about cryptocurrencies received a strong backlash from industry representatives. Speaking at an event in Wisconsin, Kashkari claimed that cryptocurrencies are mostly used in drug trafficking and illegal transactions.
Nic Carter, a leading figure in the industry and manager at Castle Island Ventures, described Kashkari's statements as "misinformation" in a post on the social media platform X (formerly known as Twitter). Carter emphasized that such misleading statements should be banned.
Hailey Lennon, a legal expert at Brown Rudnick, also joined the debate, pointing out that the cryptocurrency sector has strong anti-money laundering systems in place. Supporting Lennon’s statement, a report published by Chainalysis in recent months revealed that only 0.34% of cryptocurrency transactions in 2023 were linked to illegal activities. It was noted that this rate peaked at 1.29% in 2019, the highest in the last six years.
The remarks from the Minneapolis Fed President reflect his institution's stance on the taxation or banning of digital assets like Bitcoin. Kashkari also argued that cryptocurrencies and central bank digital currencies (CBDCs) cannot provide benefits beyond existing payment systems.
Kashkari's views are similar to those of anti-cryptocurrency Senator Elizabeth Warren and Congressman Brad Sherman. However, blockchain data and industry experts indicate that this negative approach, which has persisted for a decade, does not reflect reality and that cryptocurrencies have numerous legitimate use cases.
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