Minneapolis Fed President Neel Kashkari slammed cryptocurrencies on Tuesday, saying that the market funds illegal activity and is full of fraud.

He noted that he was initially optimistic about tokens like Bitcoin, but now he deems them as fraud, hype, noise and confusion.

"I was more optimistic about crypto or bitcoin about five or six years ago. So far, what I've seen is 99% ... let me be charitable, 95% fraud, hype, noise and confusion," Kashkari said.

And so far, according to Kashkari, no one has clearly articulated how Bitcoin can solve meaningful problems better than existing currencies. He said he had not seen any use cases other than financing illegal activities like drugs and prostitution.

In any case, Bitcoin grew explosively over the past year, soaring from below $ 12,000 to above $ 63,500. But on Wednesday, it lost more than 3% and valued $ 45,250.

The rally of Bitcoin, along with peers such as Ethereum and Dogecoin, is keeping pace with the growing popularity among individual investors, as well as the rise in corporate and institutional ownership.

It also generated interest and criticism from central banks, some of which are looking to create their own government-sponsored digital currencies.

Kashkari is the last Fed member to join the criticisms against cryptocurrencies. And in Europe, ECB Governor Christine Lagarde called for global regulation of Bitcoin earlier this year, saying multilateral action is needed to stop "fun business" and money laundering.