In a recent move by U.S. lawmakers, they’re honing in on Tether’s parent company, iFinex, due to concerns about its ties to Chinese securities. They’re proposing a law to cut off government officials from dealing with iFinex, in line with the broader crackdown on Chinese blockchain companies.
Here are all the details.
What’s the Issue at Hand?
Lawmakers are sounding the alarm after discovering that Tether, the issuer of the USDT stablecoin, has links to Chinese securities. They’re pushing for a law to stop government officials from getting involved in any transactions with iFinex.
This revelation comes from public documents released by New York’s Attorney General, uncovering that Tether Holdings has securities from Chinese companies in its reserves. Worries are mounting about the support for the USDT stablecoin, especially with loans to Chinese firms like Celsius Network.
Concerns deepen as Tether’s reserves show substantial short-term loans to Chinese firms and a significant loan to Celsius Network, sparking questions about the stability of assets backing the USDT stablecoin.
Also Read: DOJ Cracks Down: Binance and Tether Face Terrorism Financing Charges
All out in the open now!
Despite previous denials of involvement with China’s Evergrande Group’s debt, Tether hadn’t disclosed its holdings in other Chinese securities. The U.S. Securities and Exchange Commission (SEC) is keeping a close eye on Tether’s operations, especially after reports in September about quietly resuming USDT stablecoin loans to customers.
Crackdown on Chinese Blockchain Entities
The proposed law targets Tether and extends its reach to Chinese cryptocurrency firms and blockchain networks. It seeks to prohibit government officials from engaging in transactions with Chinese crypto entities and restrict government employees’ use of Chinese blockchain networks.
Read More: U.S. Bill Seeks to Outlaw China-Made Blockchains and Tether’s USDT for Government Use!
This legislative move directly impacts notable companies such as The Spartan Network, The Conflux Network, and Red Date Technology, which are actively involved in BSN projects and CBDc Digital Yuan.
National Security in Question
With the increasing role of blockchain technology in storing sensitive private data, China’s significant investment in this infrastructure raises concerns about national security and data privacy.
This legislative move reflects the growing unease in Washington about Chinese influence in the crypto world. As blockchain technology becomes more important in handling sensitive information, protecting national security becomes a top priority.
Readers, what do you think about the proposed law? Is it justified? Or is it an overreaction? And what does it mean for the future of Tether and the cryptocurrency industry?