US lawmakers introduce bill to bar Chinese AI in US government agencies
SAN FRANCISCO, June 25 (Reuters) - A bipartisan group of U.S. lawmakers on Wednesday planned to introduce a bill in both houses of Congress that would bar U.S. executive agencies from using artificial intelligence models developed in China, including those from DeepSeek.
The introduction of the bill, dubbed the "No Adversarial AI Act," comes after Reuters reported that a senior U.S. official has concluded that DeepSeek is aiding China's military and intelligence operations and has had access to "large volumes" of Nvidia's (NVDA.O), opens new tab chips.
DeepSeek shook the technology world in January with claims that it had developed an AI model that rivaled those from U.S. firms such as ChatGPT creator OpenAI at much lower cost. Since then, some U.S. companies and government agencies have banned the use of DeepSeek over data security concerns, and President Donald Trump's administration has mulled banning its use on U.S. government devices.
The bill introduced Wednesday into the U.S. House of Representatives by Representative John Moolenaar, a Michigan Republican who chairs the Select Committee on the Chinese Communist Party, and Representative Raja Krishnamoorthi, an Illinois Democrat who is the ranking member on the committee, would create a permanent framework for barring the use of all Chinese AI models from U.S. executive agencies, as well as those from Russia, Iran and North Korea.
The bill would require the Federal Acquisition Security Council to create a list of AI models developed in those countries and regularly update it.
Federal agencies would not be able to buy or use those AI technologies without an exemption, such as for carrying out research, from the U.S. Congress or the Office of Management and Budget. The law also contains a provision that can be used to get technologies off the list with proof that they are not controlled or influenced by a foreign adversary of the U.S.
"The U.S. must draw a hard line: hostile AI systems have no business operating inside our government," Moolenaar said in a statement. "This legislation creates a permanent firewall to keep adversary AI out of our most sensitive networks - where the cost of compromise is simply too high."
Also co-sponsoring the bill in the House are Representative Ritchie Torres, a New York Democrat, and Representative Darin LaHood, an Illinois Republication. In the U.S. Senate, the bill will be led by Senators Rick Scott, a Florida Republican, and Gary Peters, a Michigan Democrat.
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Coin Geek
10 minutes ago
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Getting your Trinity Audio player ready... Embattled digital asset influencer Reggie Middleton has accused the U.S. Securities and Exchange Commission (SEC) of fabricating evidence and lying to the courts in the regulator's securities case against his company, according to a series of bombshell legal filings. In what the filing calls a 'profound betrayal of the judicial process,' the SEC is accused of fabricating and concealing evidence to secure an asset freeze against Middleton's company Veritaseum—a freeze which ultimately forced Middleton to prematurely settle the case. Middleton, was originally sued by the SEC along with his firm Veritaseum in 2019 over their VERI coin offering, calling it an unregistered securities offering and based on false and misleading statements made to investors. Veritaseum's business accounts were frozen early in the litigation. Following the asset freeze, Middleton and Veritaseum settled with the SEC for $9.5 million in 2019. $7,891,600 of this was disgorged profits, which was then topped up by $582,535 in interest and a $1,000,000 penalty applied to Middleton personally. The court also granted a series of injunctions that practically banished Middleton from the digital asset industry. SEC lied to the court about money transfers That would have been the end of the matter, but now Middleton has asked the court to vacate the 2019 settlement on the basis that the SEC has 'committed fraud on the court through a calculated scheme that undermined judicial integrity.' When it initially took action against Middleton and Veritaseum, the SEC demonstrated the urgency of the case by claiming that Middleton was secretly dissipating investor assets to his personal accounts. According to Middleton's latest filings, this was a complete fabrication. At the freeze hearing following the SEC's initial enforcement action, SEC attorneys pointed to monetary transfers worth $2 million that were made by Middleton to what they said were personal accounts shortly after the SEC issued him with a Wells Notice (which notifies SEC targets of impending enforcement action). Middleton's attorneys said that these transfers were routine and had been occurring every six months for the past 18 months—something Middleton says the SEC knew but chose to dishonorably omit in its submissions to the court. Additionally, they said the accounts were not personal at all, but in the name of the company. Unfortunately for Middleton, the SEC was successful in persuading the Judge, who froze Veritaseum business assets. However, at a subsequent hearing, the SEC made further filings, which included additional evidence that Middleton now says corroborates his story about the payments. This includes a report filed by the SEC's blockchain expert Patrick Doody: buried at the bottom of a sworn statement canvassing VERI trading volumes, Doody admits that he was incorrect to previously characterize the destination accounts for the £2 million ($2.7 million) as belonging to Middleton when in fact the accounts were in the name of Veritaseum LLC. This allegedly never got the chance to come up to court at the time, as Middleton and Veritaseum reached a settlement agreement with the SEC shortly thereafter. According to Middleton's latest filing accusing the SEC of fraud on the court: 'Defendants contend this outcome was coerced by the SEC's misconduct before the Court, which froze Defendant's assets based on a lie, that rendered Defendants unable to afford to be able to proceed with legal fees to continue its fight. In effect, but for the SEC obtaining the asset freeze, Defendants would have been able to defend the allegations and proceed in the normal course of due process.' Further, Middleton accuses the SEC of fraudulently suppressing evidence in the case, including by intimidating witnesses who were willing to provide statements in support of Middleton and Veritsaeum. One Veritaseum community member and Youtuber, Michael Sheahan, was subpoenaed by the SEC after submitting an affidavit in support of Middleton. 'The session turned 'aggressive, abusive and threatening', with threats of felony charges for his support and YouTube activity, halting his public advocacy and costing him channel ownership.' The SEC also attempted to seize Sheahan's devices. Another supporter, Lloyd G. Cupp III, was approached by SEC attorneys and asked to testify against Veritsaeum. Cupp declined and insisted that VERI was a utility token and not a security. Middleton says the SEC then pressured Cupp to reconsider. 'Though not explicitly threatened, this coercion reflected the SEC's dishonourable attempt to shape testimony.' Is it enough to vacate the Middleton-Veritaseum ruling? Under U.S. civil procedure rules, a judgment obtained by fraud on the court can be vacated under Rule 60(d)(3). That wider section describes the court's authority to set aside previous judgments: critically, it says that any such request must be made within a reasonable time and no later than a year after the date of the judgment in order to be considered. However, what Rule60(d)(3) does is specify that nothing in those rules affect the court's ability to set aside a judgment for fraud on the court. Fraud on the court is a high bar to reach. Though no hard-and-fast definition exists, several U.S. cases have teased out the concept. SEC v ESM Government Securities Inc in 1981 analyzed Rule 60(d)(3) and ruled that for there to be fraud on the court, the misconduct must threaten the integrity of the judicial process itself and not just affect the merits of one party's case. Mere perjury or attorney misconduct is not by itself enough to qualify. U.S. v Buck in 2002 ruled that fraud in the court must include 1) a deliberate scheme to defraud the court, 2) with intention to deceive, and 3) which corrupts the impartial functions of the court. Middleton's latest filing argues that the SEC conducts satisfy all of these requirements. He says the conduct by SEC attorneys was intentional misconduct: they knew at the time of the asset freeze hearing that the destination of the fund transfers was a Veritaseum account rather than a Reggie Middleton account. This was done 'to create a sense of urgency to obtain the relief they desired – the asset freeze.' He also says that the conduct was such that it corrupted judicial integrity: the SEC attorney knew both that the information being presented at the freeze hearing was false and that the Judge was specifically relying on it in making her determination to freeze Veritaseum assets. The filing also points to the witness intimidation. This all pressured the defendants to settle: the frozen funds would have otherwise been used to mount a robust legal defense, but with the funds frozen, Middleton and Vertisaeum suffered fairly severe penalties due to his settlement with the SEC. In addition to the nearly $10 million worth of monetary penalties, he and his companies were barred from participating in virtually any securities-related activities, and Middleton was banned from serving as an officer or director of any securities issuer. Between those prohibitions, Middleton was practically frozen out of the digital asset industry. SEC's response The SEC filed their response to Middleton's motion to vacate last week. First, they deny any such fraud took place. They point out that at the time the Judge granted the asset freeze, she had explicitly noted that there was ongoing uncertainty regarding the distinction between Middleton's personal accounts and Veritaseum accounts and that the parties would have the opportunity to present arguments over this before the expiry of the freeze. There was no further argument, as the defendants chose to settle the case. Secondly, they say that in any case, there is no legal basis to vacate because case law shows that 'relief for fraud on the court is available only where the fraud was not known at the time of settlement or entry of judgment.' Quoting Philips Lighting Co v Schneider , the SEC argues that 'examples of conduct that reaches this high standard include bribery of a judge, jury tampering, or hiring an attorney for the sole purpose of improperly influencing the judge.' In this case, the SEC argues, that standard is clearly not met. Why target Middleton? 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