In an effort to safeguard national security intelligence and the private data of American citizens, U.S. Representatives Zach Nunn and Abigail Spanberger introduced the CLARITY Act on November 8. The legislation specifically targets China-based blockchain entities including iFinex, the parent company of Tether, The Spartan Network, The Conflux Network, and Red Date Technology Co., a significant contributor to China's national blockchain project and digital yuan.
The CLARITY Act is designed to halt federal business with Chinese blockchain firms like iFinex, which oversees Tether, the issuer of the USDT stablecoin. This move forms part of broader cryptocurrency regulation measures, as reported by CoinDesk. On the same day, U.S. legislators recommended a bill to limit business interactions with iFinex. This recommendation is part of an extensive U.S. government crackdown on Chinese blockchain firms. The move was driven by earlier concerns about potential unethical conduct by Tether.
The legislation comes in response to the substantial investment made by China in blockchain technology and aims to shield American citizens' private and national security information from "enemies", identifying China's substantial blockchain investment as a potential danger. It also prohibits transactions with The Conflux Network, The Spartan Network, and Red Date Technology Co.
Key officials including the U.S. Secretary of the Treasury, Secretary of State, and the Director of National Intelligence are tasked with formulating a strategy to mitigate threats from foreign adversaries' advancements in blockchain technology. This legislative action follows a previous security-driven TikTok ban for government employees due to allegations that the Chinese Communist Party used ByteDance's secret "backdoor" for surveillance of Hong Kong activists' locations and messages in 2018.
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