The Bipartisan “CLARITY Act” Aims to Protect National Security by Limiting the U.S. Government’s Access to Blockchain & Cloud Technologies Owned by the Chinese Communist Party

WASHINGTON, D.C. — U.S. Representatives Abigail Spanberger (D-VA-07) and Zachary Nunn (R-IA-03) yesterday introduced bipartisan legislation to combat the Chinese Communist Party’s (CCP’s) influence, prevent cyberattacks, and protect U.S. intellectual property.

The CCP has been investing heavily in the development of emerging technologies, including artificial intelligence, quantum computing, 5G, hypersonic weapons, distributed ledger technology, cloud computing, and blockchain — developing the state-controlled Blockchain-based Service Network (BSN). While blockchain is currently most known for its affiliation with cryptocurrencies, such as Bitcoin, the technology is poised to radically reshape data privacy with broad adoption across cloud storage platforms over the next decade as a way to increase security and decrease costs. If the United States were to utilize BSN, it would expose information stored on cloud platforms to CCP surveillance, including Social Security numbers, credit card numbers, passwords, photos, and other sensitive information. On the government level, the vulnerabilities are even more alarming — with critical national security information and Americans’ most sensitive data potentially at risk.

The bipartisan Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act would prohibit the federal government from utilizing blockchain technology developed by the Chinese Community Party and other foreign adversaries to ensure these countries do not have a backdoor to access critical national security intelligence and Americans’ private information. The legislation would protect American intellectual property, sensitive data, and national security by ensuring that the federal government takes this threat seriously and acts now with a coordinated response to counter potential risks.

“As a former CIA case officer and current Member of the House Intelligence Committee, I understand that the Chinese Communist Party’s investment in a state-controlled blockchain network poses significant risks to U.S. data security. Xi Jinping has made blockchain a national priority — as well as maintaining control of the information hosted on their network,” said Spanberger. “The United States must have a plan in place to keep U.S. data out of the hands of our adversaries. I’m proud to join Representative Nunn in leading the bipartisan CLARITY Act to maintain a firewall between CCP-owned blockchain and the federal government, counter the Chinese Communist Party’s influence in the global economy, and keep our nation competitive.”

“Within the next decade, every American will have sensitive, private data stored using blockchain technology. China’s heavy investment in this infrastructure poses a colossal national security and data privacy problem.  If we don’t act now, this will be a disaster 1,000 times worse than China’s ownership of TikTok,” said Nunn. “Our bipartisan bill ensures that the federal government is not giving China a backdoor to access critical national security intelligence and Americans’ private information. We must pass this bill now before it’s too late.”

Specifically, the CLARITY Act would:

• Prevent the U.S. federal government from utilizing blockchain network infrastructure, blockchain service providers, and distributed ledger technology owned by the CCP and other foreign adversaries.

• Direct the U.S. Secretary of Treasury, Secretary of State, and Director of National Intelligence to submit a report to Congress addressing the risks posed by these adversarial technologies.

Click here to read the full bill text.

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