Neel Kashkari, president of the Minneapolis Federal Reserve Bank, claims that the cryptocurrency exchange FTX is not “one fraudulent company in a serious industry,” asserting that the entire concept of cryptocurrency is absurd. Additionally, according to the Fed president, it is only a tool for “speculation and greater fools.”
“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.”
Bitcoin and other cryptocurrencies have never appealed to Kashkari— he has previously referred to them as “a giant garbage dumpster.” He claimed bitcoin and cryptocurrencies were “95% fraud, hype, noise, and confusion” in August 2021 and claimed he had not seen any other applications for them, except sponsoring illegal activities including prostitution and drug trafficking.
Some others have noted that the exchange crisis is not unique to the cryptocurrency industry, despite Kashkari’s assertion that the FTX collapse is not the result of one dishonest company in the sector. The Enron hoax and Bernie Madoff’s Ponzi scheme have both been paralleled with FTX and its former CEO Sam Bankman-Fried.
Mark Cuban, a Shark Tank celebrity and the owner of the NBA franchise Dallas Mavericks, clarified that recent collapses of cryptocurrency firms, like FTX, “have not been crypto blowups.” He stressed that they had been lending to the wrong organisation, misinterpreting collateral values, engaging in ‘arrogant’ arbitrages, and then experiencing depositor runs.