U.S. Lawmakers Propose CLARITY Act to Limit Government Transactions with Chinese Blockchain Firms
Summary:
U.S. Representatives Zach Nunn and Abigail Spanberger have proposed the Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act, aiming to restrict the U.S federal government from conducting transactions with Chinese blockchain firms. This includes cryptocurrency trading platforms and parent company iFinex, which issues the USDT (Tether). The Act, if successful, would safeguard U.S. national security intelligence and citizens' private data, following revelations about Tether's alleged financial ties to various Chinese companies.
U.S. House Representatives Zach Nunn and Abigail Spanberger have cooperatively presented the CLARITY (Creating Legal Accountability for Rogue Innovators and Technology) Act. The proposed bill seeks to stop federal government officials from engaging in business transactions with Chinese blockchain firms. The Act calls for the restriction of government employees from utilizing networks owned by Chinese blockchain or digital currency exchanges. Moreover, it specifically prohibits U.S. government personnel from making deals with iFinex, the parent firm of USDT-issuer, Tether.
Apart from iFinex, The Spartan Network, The Conflux Network, and Red Date Technology are other firms the CLARITY Act intends to bar officials from making transactions with. In a recent announcement, the public servants emphasized that the proposed law intends to prevent our overseas opponents from secretly infiltrating national security intelligence and the private data of American citizens.
Earlier in the year, it was revealed that Tether had dealings with Chinese securities and other companies based in China. Several news outlets, Bloomberg included, revealed on June 16 that Tether held assets from Chinese state-run firms. Bloomberg highlighted documents provided by the New York’s Attorney General (NYAG), pointing out that deposits from companies such as the Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China once backed USDT.
This disclosure comes after a period of extended scrutiny regarding the assets supporting Tether’s stablecoin. Tether’s reserves included significant short-term loans to Chinese firms, as well as a substantial loan to the cryptocurrency exchange, Celsius Network. While Tether had previously denied having any ties with the debt-laden Evergrande Group from China, it did not publicize its holding of other Chinese securities.
In relation to Tether issues, it gave a $610M debt finance to Bitcoin miner Northern Data. Additionally, the U.S. SEC keeps a watchful eye on Tether’s operations. An earlier report implied that Tether stealthily commenced offering USDT stablecoin loans to its clients a year after its owner, Tether Holdings, vowed to discontinue offering secured loans.
According to the bill's proposers, this latest move punctuates the rising apprehension within Washington over perceived Chinese influences in the global cryptocurrency industry.
Published At
11/9/2023 1:04:51 PM
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