A new bill making its way through the U.S. Senate could complicate investments in ByteDance, the Chinese company behind the popular social media app TikTok. This bill, which has already passed the House, would require ByteDance to sell TikTok amid growing concerns about its Chinese ties and potential national security threats. U.S. investors who have poured billions into ByteDance, such as General Atlantic, Susquehanna International Group, and Sequoia Capital, are now facing heightened pressure from state and federal lawmakers to address their investments in Chinese companies.

The issue of U.S. investments in Chinese companies has been under scrutiny for some time, with the Biden administration taking steps to curb such investments. Last year, a House committee started examining U.S. investments in Chinese companies, leading to divestments from some funds. Florida also recently passed legislation requiring the state’s Board of Administration to sell off its stakes in Chinese-owned companies.

ByteDance, valued at $225 billion, has become one of the world’s most highly valued start-ups. However, U.S. investors in the company face challenges due to ByteDance’s private status, which limits their ability to sell their stakes. Additionally, the Chinese government has shown reluctance to relinquish control of influential companies like TikTok to American buyers in the past.

Investors like Susquehanna, Sequoia Capital, and General Atlantic have been involved with ByteDance for years, with some owning significant percentages of the company. While these investments have been lucrative on paper, they are largely illiquid, making it difficult for investors to realize their gains.

The deteriorating relationship between the U.S. and China has put a spotlight on American investments in Chinese companies. Last year, President Biden signed an executive order banning new American investment in technology industries that could enhance Beijing’s military capabilities. Congressional investigations have revealed significant investments by U.S. venture capital firms in China, raising concerns about national security implications.

Some U.S. investors have taken steps to distance themselves from Chinese investments, such as Sequoia Capital spinning off its Chinese operation. Political donations from investors like Jeffrey Yass have also come under scrutiny, highlighting the blend of financial and ideological motivations at play.

The future for U.S. investors in ByteDance remains uncertain, with the possibility of a forced sale of TikTok looming. However, the outcome of the Senate bill is still unclear, leaving investors in a state of uncertainty. With no immediate resolution in sight, scrutiny of ByteDance’s investors is likely to continue.