Federal Reserve Bank President Says ‘Entire Notion of Crypto Is Nonsense’

Federal Reserve Bank President Says "Entire Notion of Crypto Is Nonsense"

The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, says crypto exchange FTX isn’t “one fraudulent company in a serious industry.” Stating that the “Entire notion of crypto is nonsense,” the Fed president claimed it is “just a tool of speculation and greater fools.” Minneapolis Fed President Neel Kashkari on Crypto and FTX Collapse

Federal Reserve Bank of Minneapolis President Neel Kashkari shared his view on the collapse of cryptocurrency exchange FTX Friday.

“This isn’t [a] case of one fraudulent company in a serious industry,” he tweeted, elaborating: Entire notion of crypto is nonsense. Not useful for payments. No inflation hedge. No scarcity. No taxing authority. Just a tool of speculation and greater fools.

Kashkari has never been a fan of bitcoin or crypto. He previously called them “a giant garbage dumpster.” In August last year, he said bitcoin and crypto were “95% fraud, hype, noise, and confusion,” stating: “I’ve not seen any use case other than funding illicit activities like drugs and prostitution.”

Following the FTX meltdown, several Fed officials called for stricter cryptocurrency regulation. Federal Reserve Vice Chair Lael Brainard has stressed the importance of strong cryptocurrency oversight. “It’s really concerning to see that retail investors are really getting hurt by these losses,” she opined.

Michael Barr, Federal Reserve’s vice chair for supervision, said in response to a question at a Senate Banking Committee hearing last week: We’re concerned about the risks that we don’t know about in the non-bank sector. That includes obviously crypto activity … that can create risks that blow back to the financial system that we do regulate.

While Kashkari believes that the FTX collapse is not the case of one fraudulent company in the crypto industry, some people have pointed out that the exchange meltdown is not crypto-specific. FTX and its former CEO Sam Bankman-Fried have been compared to the Enron fraud or Bernie Madoff’s Ponzi scheme.

Shark Tank star and the owner of the NBA team Dallas Mavericks, Mark Cuban, explained that recent blowups of companies in the crypto space, including FTX, “have not been crypto blowups.” He emphasized: “They have been banking blowups … Lending to the wrong entity, misvaluations of collateral, arrogant arbitrages, followed by depositor runs.” Tags in this story crypto nonsense, fed officials crypto, fed president crypto, fed vice chair crypto, Neel Kashkari, Neel Kashkari crypt, Neel Kashkari crypto, Neel Kashkari cryptocurrency

What do you think about the comments by Federal Reserve Bank of Minneapolis President Neel Kashkari? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Brazilian Cryptocurrency Bill Resurfaces After General Ballot REGULATION | 23 hours ago Former US Regulator Likens FTX and Sam Bankman-Fried to Bernie Madoff and His Ponzi Scheme REGULATION | 2 days ago

Image Credits: Shutterstock, Pixabay, Wiki Commons, lev radin Previous articleEthereum Co-Founder Vitalik Buterin Discusses FTX Collapse — Says ‘Centralized Anything Is by Default Suspect’ Next articleSouth Korea, Singapore, Japan Top Countries Most Impacted by FTX Collapse: Report Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"

The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.Bitcoin ATM Operator Indicted in New York Allegedly Running Illegal Business Attracting Criminals Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Goldman Predicts US Recession Odds at 35% in 2 Years, John Mauldin Wouldn"t Be Surprised if Stocks Fell 40%