Nic Carter slams Minneapolis Fed President for saying crypto is ‘almost never’ used outside of criminal activity

Venture Capitalist Nic Carter is criticizing Minneapolis Federal Reserve President Neel Kashkari for his remarks that cryptocurrency is “almost never” used outside of illegal activities, even though the data tells a different story.

“It should be illegal to be this wrong,” Nic Carter wrote in an X post on October 22, in response to Neel Kashkari’s remarks that cryptocurrency is mostly used for illegal activities. He viewed Kashkari’s comments as unfortunate, as he is one of the ten most important financial regulators on the planet.

Carter continued his post by linking various data sources that refute Kashkari’s assumption; these include a report from blockchain data firm Chainaliz that found that only 0.34% of all crypto transactions in 2023 were linked to illegal activities.

The report revealed that illicit transactions in crypto peaked at just 1.29% in 2019.

At a Wisconsin Town Hall event hosted by the Chippewa Falls Area Chamber of Commerce on October 21, Minneapolis Fed President Neel Kashkari claimed that “very few transactions are actually happening” in crypto.

“They don’t pay for goods and services using crypto. This almost never happens unless people are buying drugs or other illegal activity,” Kashkari said.

A recent study by Crypto ISAC found that cash remains the financial instrument of choice for criminals for criminal activities. While cryptocurrencies have been linked to numerous high-profile crimes, including stock market crashes and thefts, the actual portion is still significantly smaller.

While the exact amount of illicit activity in traditional finance is difficult to track, Crypto ISAC states that the estimated amount of money laundered globally in a year is between 2% and 5% of global GDP, ranging from $800 billion to $2 trillion. .

Of this total figure, only 0.34% of trading volume consists of cryptocurrencies. The US Treasury echoed these findings, stating that cash remains the primary method of choice for money laundering due to its anonymity, stability and ubiquity.

Kashkari’s stance on cryptocurrency has remained the same for the past few years. In February 2024, Kashkari further questioned the cryptocurrency’s ability to be an effective hedge against inflation, saying Bitcoin (BTC) was a risky asset with no practical use in real economic scenarios.

On October 17, the Minneapolis Fed published an article urging governments to either ban Bitcoin or enact a Bitcoin tax if they want to maintain permanent primary deficits.