According to a report by CoinDesk, US lawmakers introduced a new bipartisan bill on Wednesday (8th) to prohibit government officials from conducting business with Chinese blockchain companies, and explicitly prohibit officials from trading with iFinex, the parent company of stablecoin USDT issuer Tether.
The “Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act” is co-led by Republican Congressman Zach Nunn and Democratic Congresswoman Abigail Spanberger. According to a press release, the bill will prevent the government from utilizing blockchain infrastructure, service providers, and distributed ledger technology developed by China and other foreign adversaries. It instructs the US Treasury Secretary, Secretary of State, and Director of National Intelligence to develop a plan to “mitigate the risks posed by Chinese and other foreign adversaries developing blockchain technology.”
The legislation aims to ensure that US adversaries do not have backdoor access to critical national security information and the privacy of Americans. Newly elected Congressman Nunn, who joined the House this year, stated that the bill also prohibits US officials from trading with development companies behind The Spartan Network, The Conflux Network, and Red Date Technology Co., the company behind China’s National Blockchain Project and central bank digital currency.
The two sponsors of the bill are not part of the House leadership and do not hold key positions on committees. Other more senior legislators have been pushing multiple cryptocurrency bills, some of which also address security issues. Some bills have already received approval from the full House committee and are advancing further, so the new bill is unlikely to preempt them.
Before introducing these restrictions, some lawmakers this summer prohibited government employees from using the Chinese social media app TikTok for security reasons. Earlier this year, a former executive of TikTok’s parent company ByteDance alleged in court documents that the Chinese Communist Party used a secret “backdoor” on its social media platform in 2018 to monitor the location and messages of Hong Kong activists. ByteDance later strongly denied these allegations.