US Lawmakers Introduce CLARITY Act to Limit Federal Ties With Chinese Blockchain – Zach Nunn and Abigail Spanberger, Representatives in the United States, collaboratively presented the CLARITY Act of 2023. This proposed law seeks to restrict interactions between federal government officials and Chinese blockchain companies, emphasizing legal accountability for rogue innovators and technology.
This legislation prohibits government personnel from utilizing the infrastructure of Chinese blockchain or cryptocurrency trading platforms. Additionally, it explicitly bars U.S. government officials from participating in transactions with iFinex, the parent company of the USDT issuer Tether. Apart from iFinex, the CLARITY Act would restrict officials from engaging in transactions with the Spartan Network, the Conflux Network, and Red Date Technology.
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In a statement on Wednesday, the lawmakers said that the legislation, if passed, would ensure the nation’s “foreign adversaries do not have a backdoor to access critical national security intelligence and Americans’ private information.” In early 2023, reports surfaced about Tether’s exposure to Chinese securities and other firms. On June 16, various news outlets, including Bloomberg, revealed that the company had previously held securities from Chinese state-owned entities.
The disclosure, based on documents from the New York Attorney General, highlighted deposits from institutions such as the Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China supporting Tether. After years of scrutiny and apprehension regarding Tether’s stablecoin backing, this disclosure unveils significant aspects. Tether’s reserves encompass notable short-term loans to Chinese firms and a substantial loan to the cryptocurrency platform Celsius Network.
While Tether had denied any connection with the debt of China’s troubled Evergrande Group, its holdings of other Chinese securities had not been previously disclosed. Moreover, the U.S. Securities and Exchange Commission is closely scrutinizing Tether’s activities. In September, a report indicated that the company discreetly resumed offering USDT stablecoin loans to customers, a year after pledging to halt secured loans. The sponsors of the bill assert that this recent development highlights Washington’s increasing apprehensions regarding Chinese involvements in the cryptocurrency sector.