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Neel Kashkari, head of the Minneapolis Federal Reserve, stated that cryptocurrencies are primarily used for illegal activities, sparking backlash from industry figures. Nic Carter, partner at Castle Island Ventures, and Hailey Lennon, a partner at law firm Brown Rudnick, condemned Kashkari’s comments, pointing to regulation and the low percentage of crypto transactions linked to illegal activity. Despite Kashkari’s criticism, Chainalysis data disputes his claims, showing only 0.34% of all cryptocurrency transactions in 2023 were linked to illegal conduct. His comments contradict the Federal Reserve Bank of Minneapolis’s recent suggestion to tax or ban Bitcoin.

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Neel Kashkari, the head of the Minneapolis Federal Reserve, ruffled a few feathers recently by saying that people only use cryptocurrency for illegal activities like buying drugs. He made these comments during a talk at a local event in Wisconsin, claiming that hardly any transactions use cryptocurrency.

The gist of his remark was that people aren’t using cryptocurrency to buy regular goods and services. Instead, it’s only being used for shady purposes.

Of course, these comments weren’t well-received. Nic Carter, a partner at Castle Island Ventures, wasn’t pleased and declared that Kashkari was completely wrong. Carter found these misconceptions rather distressing considering Kashkari’s significant role as a global financial regulator.

Hailey Lennon, a partner at law firm Brown Rudnick, also had something to say. She pointed out that actual cryptocurrency projects have strict policies to prevent illegal activities, contrasting this with physical cash typically being the go-to for illicit dealings.

Despite his skepticism about Bitcoin, data shows that Kashkari’s claims aren’t justified. According to a report by Chainalysis, a blockchain data company, only about 0.34% of all cryptocurrency transactions in 2023 were connected to illegal activity. Interestingly, the highest amount of illegal activities involving cryptocurrency over the past six years was only 1.29% in 2019.

Contradicting his own institution, Kashkari’s remarks came just after the Federal Reserve Bank of Minneapolis commented that Bitcoin should be taxed or even banned. He’s previously compared cryptocurrency to a “giant garbage dumpster” and stated that digital currencies can’t do anything that modern payment apps like Venmo can’t handle.

Source: Cointelegraph