The CLARITY Act Explained
U.S. Representatives Zach Nunn and Abigail Spanberger have rolled out the welcome mat for a new legislation: the Creating Legal Accountability for Rogue Innovators and Technology Act of 2023, affectionately known as the CLARITY Act. It’s more than just an acronym; it’s a battle cry against foreign adversaries infiltrating U.S. blockchain technology.
Key Provisions of the Act
This legislation is not pulling any punches. It aims to put a firm foot down, effectively banning our government employees from conducting business with Chinese blockchain companies. But wait, there’s more! Officials won’t just be skirting around the issue; they’ll be completely prohibited from using the underlying networks of these companies and engaging in transactions with notable names like iFinex, the parent company of Tether.
Why Tether is in the Crosshairs
Why so serious about Tether, you might wonder? Earlier in 2023, Tether’s ties to Chinese firms raised a few eyebrows. Bloomberg, in a classic investigative journalism style, revealed that Tether had been dabbling in securities from various Chinese state-owned firms. Can you imagine the government’s reaction? Cue the dramatic music!
National Security at Stake
The lawmakers argue that the act seeks to safeguard against foreign adversaries having “a backdoor to access critical national security intelligence and Americans’ private information.” Which, let’s be honest, is a pretty legitimate concern given the ever-evolving landscape of cryptocurrency. The potential for these networks to undermine U.S. safety is a compelling reason for the legislation.
The Ripple Effects
This act isn’t stopping at iFinex. It’s also throwing a ban on the Spartan Network, the Conflux Network, and Red Date Technology. The implications may ripple through the crypto community, causing some businesses to shake in their boots. Or should I say, shake in their digital wallets?
Tether’s Response to Scrutiny
Tether’s history is as twisted as a pretzel. Just when they say they’re not involved with certain loans, new revelations pop up like surprise guests at a party. With substantial loans to various Chinese firms and the infamous Celsius Network, Tether’s credibility may just be hanging by a thread. The SEC is monitoring them like a hawk, especially after reports surfaced about secret loans tied to their USDT stablecoin.
