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US lawmakers have introduced a bill that would prohibit federal government officials from doing business with iFinex, the parent company of Tether, the largest stablecoin with a market value of $86.2 billion and the second largest altcoin. This move comes after the US government announced pressure on Chinese Blockchain companies.
A Blow to Chinese Blockchain Companies from the US
US lawmakers have introduced a bill that would ban government officials from doing business with Chinese cryptocurrency companies and using Chinese Blockchain networks that support cryptocurrency trading platforms. This bill will also affect companies involved in BSN projects and the ongoing development of the Digital Yuan project, such as The Spartan Network, The Conflux Network, and Red Date Technology.
US lawmakers stated that the purpose of this latest bill is to prevent the country’s foreign adversaries from having a backdoor to critical national security intelligence and Americans’ private information. They also highlighted that in the next decade, Blockchain technology will store sensitive private data for every American, and China’s significant investment in this infrastructure raises concerns about national security and data privacy.
The proposed bill not only bans doing business with iFinex, the parent company of Tether, but also reflects Washington’s growing concerns about its connections to the Chinese cryptocurrency sector.
Tether, China, and the US
Earlier this year, Tether faced significant allegations of being closely associated with Chinese securities and other Chinese companies. The New York Attorney General publicly shared documents that showed Tether had held Chinese companies’ securities in its reserves after years of investigations and debates about the assets backing the stablecoin USDT.
According to the documents shared by the New York Attorney General, Tether’s reserves mainly consisted of short-term loans given to Chinese companies and a substantial loan to the crypto platform Celsius Network. Although Tether claimed to have no securities relationship with the financially troubled Chinese Evergrande Group, it did not provide any information regarding its holdings of other Chinese securities.
In a report published in September, it was alleged that Tether secretly started providing loans in USDT to its customers a year after pledging to stop providing secured loans.
