Marshall Blames Increased Border Crossings For The Increase In ‘Money Laundering…With The Chinese’

4 months ago

Earlier this month, Sen. Roger Marshall (R-KS) questioned experts on immigration and agriculture durign a Senate Agriculture Committee hearing.

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Transcript

00:00Senator Marshall. Thank you, Madam Chair. Chairman, welcome back for the committee.

00:06It was great to see you in Kansas City in the spring and appreciate you and your

00:09team coming there for a Commodities Future Conference. Thanks to a wide-open

00:14southern border, we've seen an explosion of fentanyl deaths, fentanyl poisoning

00:19deaths, human trafficking. We've seen a large amount of illegal marijuana now

00:25being grown on farms, marijuana farms in states bordering Kansas. At the end of

00:32the day, all this organized crime is resulting in money laundering, for the

00:39most part with crypto. The Chinese triad, the Chinese organized crime manages this

00:46crypto. Why is crypto the currency of choice for criminals? Senator, thanks for

00:53the question. I would say twofold, not an exhaustive response, certainly, but one,

00:59there really aren't borders to crypto. You obviously can transfer money globally,

01:05fiat money globally, but in terms of cryptocurrencies, stablecoins, actual

01:10digital assets, Bitcoin, Ether, it is a, in some respects, a borderless type of

01:16currency, so it's easy to move across borders. Other than that, or in addition

01:20to that, excuse me, I would say it's the reason we're here today. There is largely

01:24a vacuum in the regulatory space on both the digital asset market side, which is

01:29what this committee needs to consider as it relates to the CFTC, but also the

01:34stablecoin side, which deals with other agencies and other committees. So the

01:39larger picture is there's some state-level regulation around money

01:42transmission, there's some federal regulation around FinCEN and AML, KYC, and

01:47but a lot's missing. If I could, do you feel it's just as important for the

01:51crypto industry to know their customer as a bank does to know their customer?

01:55100%. Okay. As we go forward, I'm fearful that the SEC would have an outsized role

02:05in determining if something is digital commodity or not, and I'm equally

02:09concerned that your agency could be sued if it does not comply. Do you, two

02:16questions here, I think it's the same answer. Do you support the SEC making

02:20decision on what it is under the CFTC's jurisdiction, and two, do you think it's

02:27a good use of federal government's time to have two agencies fighting over the

02:30designation of a digital commodity? Senator, so short answer is no, but it's

02:38important that as we have, as two agencies done in the past, work together

02:43to make determinations around certain assets that, I'll call it a gray area,

02:49exist in a gray area around what a security and a commodity is, and that has

02:53happened for the better part of five decades. So you're not worried that the

02:56SEC says this is a commodity and the CFTC says it's not, and you

03:02get sued over it, you're not concerned that that's going to happen? I can't say

03:06that it's not going to happen. I think in this particular area, this digital asset

03:10space, there's a lot of legal questions of first impression. In our traditional

03:15commodity markets, we have been dealing with determining what's a

03:19commodity and its security for decades, so it becomes a little bit customary and

03:23rote. At this particular moment, I think it's important that we preserve, as I

03:29said in my opening statement, a core principle model, a self-certification

03:33model as well, which has worked quite well for the agency for the better part

03:36of two decades, but also I do think given the size of the market, the number

03:41of tokens, and some of the novel legal questions, it is important, as

03:46the agencies have done historically, work closely together to find consensus

03:50around whether or not a token is a security or a commodity. So what I'm

03:54concerned about is we're writing legislation that sets up a system for

03:58this fight in the courts, when instead we need to make sure that we're writing

04:02legislation that creates total clarity of the SEC's versus the CFTC's

04:08jurisdiction over digital assets. Do you share that concern? I share that concern

04:15to the extent or in regards to the fact that whatever this

04:19committee considers in the future, I do believe there should be a system of

04:24listing contracts that is both similar and typical to what we have done at the

04:30CFTC in the past, but also does contemplate to an extent a relationship

04:36between the two agencies that we can work efficiently together. And the last

04:40thing I'll say is I do think there's a way to build a system of listing

04:43contracts that doesn't prolong or delay the listing of contracts in a regulated

04:49market. We want to get these contracts, these tokens, on regulated markets as

04:54soon as possible so that we can eliminate or reduce the risk of customer

04:58loss and enhance customer protection. So I'm a person who always

05:02believes that the government makes the simple complicated, and what leaders do

05:06is make the complicated simple. Wouldn't it be simpler if we just put this all

05:10into the CFTC's jurisdiction, and them being the primary regulator, and maybe

05:16there's some offshoots for the SEC, but truly designating this is the

05:20CFTC's baby? Senator, I speak for myself. I would be happy to do that. I

05:26think we have the capacity to do that, the expertise, and the experience. There

05:31may need to be some definitional changes to what a security is and what a

05:35commodity is to accomplish that outcome.

05:39All right, thank you so much. Senator Welch. Thank you very much. I appreciate

05:46you and Senator Boozman having this hearing.

Marshall Blames Increased Border Crossings For The Increase In ‘Money Laundering…With The Chinese’

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Transcript

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