CLARITY Act 2023: U.S. Act to Block Transactions with Chinese Blockchain Companies

The CLARITY Act: What’s All the Fuss?

Representatives Zach Nunn and Abigail Spanberger are shaking things up with the newly introduced Creating Legal Accountability for Rogue Innovators and Technology Act of 2023, affectionately dubbed the CLARITY Act. This legislation is like an ‘anti-spy’ device for our government, aiming to keep federal officials out of bed with Chinese blockchain companies.

Ban on Transactions with Chinese Firms

Under the CLARITY Act, it’s bye-bye to any business dealings involving federal government employees and Chinese blockchain or cryptocurrency platforms. Think of it as a digital red tape—no trading or risk-taking allowed. It even names names, putting the spotlight on companies like iFinex, the parent company of Tether, writing a definitive ‘do not engage’ note for U.S. officials.

Why the Concern?

The legislation comes on the heels of a drip-drip of revelations casting shadows over Tether’s ties with Chinese interests. In a nutshell, they’ve been playing footsie with Chinese state-owned securities. What’s at stake, you ask? National security. This is the policymakers’ way of ensuring that our foreign adversaries aren’t peeking through the backdoor to snoop on sensitive information.

Tether’s Rising Reputation Woes

Now, for the juicy part—Tether has been in hot water since reports revealed that it held various securities from Chinese firms, including the likes of China Construction Bank and the Agricultural Bank of China. The U.S. public is left scratching their heads, wondering how a company known for digital coins got so tangled in the web of traditional finance in China.

SEC Scrutiny and Future Outlook

And if you thought that was the end of it, think again. The U.S. Securities and Exchange Commission has its hawk eyes trained on Tether too. As of September, whispers surfaced that Tether might have broken its promise to cut back on secured loans, allegedly peddling USDT stablecoin loans in secret. With the CLARITY Act in play, lawmakers may finally get the clarity they crave about crypto dealings and foreign influences.