Luján Calls For Cooperation: There's A 'Difference Of Opinion’ In How We Get This Farm Bill Done

4 months ago

Before the Congressional recess, Sen. Ben Ray Luján (D-NM) questioned officials on agricultural oversight and digital currencies during a Senate Agriculture Committee hearing.

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00:00Again, we certainly need to get a farm bill done and we just have a real difference of

00:08opinion as to how we get that done and what we need to be doing.

00:14The good news is, as I talk to members, every member I talk to wants to get a farm bill

00:19done.

00:20I think there is a path forward and certainly everyone is negotiating in good faith.

00:28All right, Senator Lujan, thank you for being so patient before us, Senator Brown.

00:35Thank you, Madam Chair, and thank you to both you and the Ranking Member for this important

00:39hearing.

00:40Chairman, thank you for being here today.

00:42I have a question about a concern that I have that exists in the U.S. financial system and

00:51sector from a rules perspective.

00:54Because this hearing is focusing on crypto, my question is pointed towards cryptocurrencies.

01:03If a cartel was laundering money from illicit drug sales at the border using cryptocurrency,

01:09are there any federal regulations that would require exchanges to report that activity

01:14to law enforcement?

01:16Senator, thanks for the question.

01:22The exchanges that currently operate right now, as I pointed out to the Chairwoman, are

01:26not subject to regulation by a federal regulator for non-security tokens.

01:34That said, the exchanges that do participate in this space that are not regulated, again,

01:40do comply with various requirements by FinCEN and then money transmitter requirements at

01:47the state level.

01:48If there was, in your hypothetical, the cartel intersected with an exchange to move the money,

01:57to launder the money, to move it into a different form of currency, then I do believe there

02:03would be a requirement at the state level and then by virtue of the FinCEN requirements

02:11to report it.

02:12But, again, that, I think, exposes –

02:13To report it to who, Chairman?

02:17To the federal level, it would be the Treasury Department's FinCEN, I believe, at the state

02:21level.

02:22So it would get sent to Treasury.

02:23So in the same way that a SARS report is held at Treasury if a financial institution is

02:28found of wrongdoing or a financial institution has caught laundering money for a cartel or

02:34someone else, the current system requires that financial institution to appoint somebody

02:40to be approved by Treasury to be the watcher from inside.

02:43Sounds like a pretty good gig, but it's the internal person to watch over the alleged

02:49wrongdoing and come up with the report for that financial institution to correct its

02:53behavior and then Treasury keeps that report and Treasury keeps that report in a vault

02:58somewhere apparently.

02:59I don't know who gets to see them.

03:01No one that I'm aware of.

03:02So is it that same reporting that goes to Treasury is what would happen today?

03:07Senator, I can't speak to the SARS process and necessarily where it goes and who sees

03:12it.

03:13Again, that's a question probably for Treasury, but knowing the FinCEN requirements, the Crime

03:19Enforcement Network at Treasury, and then also the state-level money transmitter requirements,

03:24again, if there was an intersection with a cartel with one of these exchanges, I do believe

03:30through either the FinCEN requirements or the state-level requirements, there would

03:33be a requirement to report any activity like that.

03:37So for some, yes.

03:38For some, no.

03:39It depends how, again, this is really the problem that I think you're rightfully exposing

03:44is that there are gaps all along this chain.

03:47Let me ask the question this way.

03:49Why is it important to have federal requirements to report suspicious activity to law enforcement?

03:54Not unlike the question that Senator Grassley provided around whistleblowers, SARS reports,

03:59which as you pointed out are suspicious activity reports, are extremely important for regulators

04:03because we're utilizing the information that institutions have on the inside as they identify

04:10suspicious activity, whether it's a transaction or a payment or anything like that.

04:14So as much as we have a lot of tools in the regulated space, they're limited, and when

04:20we reach that limitation, we do rely on the regulated market to report things to us, which

04:25is, again, it's not unlike the whistleblower program or the complaints and tips.

04:29So SARS reports are extremely important.

04:32They certainly come into play with some of our regulated institutions, which are regulated

04:35by multiple regulators, but they are certainly, I think, more prevalent within the banking

04:40space than prudential supervisors and regulators.

04:44So I believe suspicious activity reports are a tool to help stop illicit financing.

04:48I don't believe there is enough attention brought in the United States to illicit financing.

04:53While I supported the legislation that would have provided more support to changing asylum

05:01rules in the country and changing investments for border security, no one wants to talk

05:08about illicit financing because it's a bunch of folks that wear the nicest suits and the

05:12nicest ties and wear the nicest jewelry that get reported for something, maybe even get

05:17charged with something, and they don't go to jail.

05:19They get to go swim in their swimming pool in whatever country they choose to go to that

05:23weekend.

05:25There's not enough attention brought here.

05:26So the reason I'm raising this is there's been reports coming out of China that Chinese

05:32crime syndicates are using cryptocurrencies to launder billions of dollars, including

05:35money raised from fentanyl sales in America.

05:39Other countries are cracking down.

05:40The United States is not doing a darn thing about this, and I think that this exists across

05:45every sector of the false rules that exist within holding people accountable in the United

05:52States.

05:53So with that, Madam Chair, I'll reserve the rest of my questioning, but I hope we can

05:56do something about this to be included in this legislation so that we can really get

06:02our hands around one of the causes of so many deaths, 100,000 deaths of fentanyl alone in

06:10America because someone's able to make a buck off of it.

06:13It's not going to stop until we can shut that valve off.

06:17So I appreciate that.

06:18Thank you, Madam Chair.

06:19Thank you very much, Senator Lujan.

06:21I know you have raised this to me.

Luján Calls For Cooperation: There's A 'Difference Of Opinion’ In How We Get This Farm Bill Done

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