Lael Brainard highlighted the perceived risks still posed by cryptocurrencies in remarks delivered today in Frankfurt Germany. Brainard was speaking as part of a panel honoring Benoît Coeuré, a member of the executive board of the European Central Bank (ECB).
Brainard: crypto exchange security troubling
Specifically selected for the panel, which formed part of the “Monetary Policy: The Challenges Ahead” event in Frankfurt, Germany, was illicit activity involving Bitcoin.
According to Brainard, who cited an academic study from earlier this year, Bitcoin still contains a significant malicious user base.
“Only a third of the most popular exchanges require ID verification and proof of address to make a deposit or withdrawal. This is troubling, since a number of studies conclude that cryptocurrencies support a significant amount of illicit activity,” she told the audience.
Continuing, Brainard added that as much as 50% of all Bitcoin transactions were in some way conducted against the law:
“One study estimated that more than a quarter of bitcoin users and roughly half of bitcoin transactions, for example, are associated with illegal activity.”
Calculating the incalculable
The admonishing tone of the speech adds to the sea of misconceptions over Bitcoin’s real-world usage. As Cointelegraph reported, studies into transactions regularly produce opposing conclusions — others suggest that a lack of anonymity means genuine criminals still prefer cash.
Further difficulties lie in stating exactly how many people use Bitcoin, as a user can control an infinite number of addresses.
The speech comes ahead of sweeping new cryptocurrency regulations coming into force in the European Union. For his part, Coeuré has remained highly critical of Bitcoin in particular, previously describing it as the “evil spawn of the financial crisis.”