‘No question of lights going out this winter’ business secretary declares – as gas prices soar
There is “absolutely no question of the lights going out this winter” and the energy price cap will remain in place despite escalating gas prices, the business secretary has said.
Kwasi Kwarteng said the cap “protects millions of consumers” and reiterated “the need for us all to prioritise consumers” during crisis talks with industry figures.
Following the talks, he told the House of Commons: ”We have sufficient capacity, and more than sufficient capacity, to meet demand and we do not expect supply emergencies to occur this winter.
“There’s absolutely no question of the lights going out or people being unable to heat their homes.
”There’ll be no three-day working weeks or a throwback to the 1970s. Such thinking is alarmist, unhelpful and completely misguided.”
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Energy boss: It’s ‘crunch time’ for many small providers
Labour’s Ed Miliband accused the government of complacency and said it had known for a long time about the issue with gas.
Mr Kwarteng added that the UK “benefits from having a diverse range of gas supply sources” and gas production in Norway will “significantly increase” from 1 October to support UK and European demand.
Wholesale prices for gas have increased 250% since the start of the year and there has been a 70% rise since August.
Consumers are protected from sudden price hikes by the energy price cap, but this puts pressure on suppliers as they cannot pass on the increase in wholesale gas prices to customers.
The rise has been put down to a number of factors, including a cold winter leaving stocks depleted, high demand for liquefied natural gas from Asia and a drop in supplies from Russia.
Four firms have already gone bust and there are fears that others could follow suit, with energy company Bulb, which has 1.7m customers, confirming it is seeking a bailout to stay afloat.
But Mr Kwarteng said the government “will not be bailing out companies, there are no rewards for failing”.
He did not say if this applied to the big energy companies as well as the small ones.
Boris Johnson told Sky News political editor Beth Rigby, in New York, where he is for a UN climate change meeting: “I think you need to listen to what Kwasi Kwarteng has to say, he’s been working flat out with the energy companies, doing everything he can to help them.
“Clearly, their business model has been badly affected with the wholesale price massively increases, spikes in this way and loads of customers on fixed tariffs.
“We’re working very hard to find a way through, trying to keep a steady supply of gas.”
Some analysts have reportedly predicted the number of energy companies could drop by three quarters in the months to come, leaving as few as 10 still operating.
Mr Kwarteng said: “As I said, you may see more suppliers than usual exiting the market but this is not something which should be any cause for alarm.”
He added that he will be releasing a joint statement with regulator Ofgem later on Monday.
On Monday, Ofgem said British Gas will take over the 350,000 domestic customers of People’s Energy after it went bust earlier this month.
Speaking on Sunday after a meeting with Ofgem, Mr Kwarteng said “well-rehearsed plans” were in place to ensure consumers were not cut off in the event of further failures.
However, he is expected to come under pressure from the big suppliers for a major government support package to help them through the crisis.
Asked about the issue as he arrived in New York for the United Nations General Assembly, Prime Minister Boris Johnson said: “I think people should be reassured in the sense that yes there are a lot of short-term problems not just in our country, the UK, but around the world caused by gas supplies and shortages of all kinds.
“This is really a function of the world economy waking up after COVID.
“We’ve got to try and fix it as fast as we can, make sure we have the supplies we want, make sure we don’t allow the companies we rely on to go under. We’ll have to do everything we can.
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Minister: ‘Range of options’ for energy crisis
“But this will get better as the market starts to sort itself out, as the world economy gets back on its feet.”
Labour’s shadow business secretary Ed Miliband said a lack of long-term planning from the government means “we are so exposed and vulnerable as a country and it is families and businesses that are paying the price”.
He continued: “The government must take all necessary steps to ensure stability for customers and do everything in its powers to mitigate the effects of this crisis on businesses and consumers.
“Yet it is making the squeeze on household finances worse by putting up taxes for working people and cutting Universal Credit.”
The Federal Court of Australia has sided with fintech firm Block Earner in an appeal against a ruling that found it was required to hold a financial services license for its now-discontinued crypto-related products.
Block Earner’s crypto-linked fixed-yield earning product is not a financial product, or a managed investment scheme, and is not a derivative under the Corporations Act, Justices David O’Callaghan, Wendy Abraham and Catherine Button said in an April 22 judgment.
The trio said Block Earner’s yield product couldn’t be classed as an investment or financial product because users loaned crypto under fixed terms for interest payments and didn’t pool contributions to generate further benefits. The terms and conditions framed it as a loan, and users had no exposure to the firm’s business outside of the agreed interest rate, they added.
The Australian Securities and Investment Commission (ASIC), which first brought the case, has been ordered by the court to pay costs for the proceedings, including appeals. The regulator said in an April 22 press release that it is currently “considering this decision.”
Block Earner’s chief commercial officer, James Coombes, told Cointelegraph the court decision brings clarity that crypto assets shouldn’t be treated differently from other asset classes when applying existing laws.
“Our product was simply defined as one where customers would lend their assets to us for a fixed return, there was no share in the upside of the pool of assets and as such no Managed Investment Scheme existed,” he said.
“The fact that it included crypto assets should not alter that simple definition, and I believe this case forms a bedrock for ambitious brands around Australia to build from.”
An ASIC spokesperson declined further comment.
Earner product won’t make a return
Despite the win in court, Block Earner will not be reviving its Earner product after axing it when legal proceedings began, but Coombes said that “crypto-backed loans products remain the core focus of the company.”
“Regulation going forward is not an easy task, and we empathise with the regulators on this point,” Coombes added. “We hope a collaborative process can bring about positive change.”
Related: Australia outlines crypto regulation plan, promises action on debanking
ASIC launched civil legal proceedings in November 2022, arguing that Block Earner needed an Australian Financial Services License to offer its three crypto-linked fixed-yield earning products.
In February 2024, an Australian court initially found the fintech firm would need a financial services license to operate its crypto yield-bearing products.
Another June 2024 ruling released Block Earner from any financial penalties because it had “acted honestly” and pursued its legal opinions before launching the products, which ASIC appealed.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
Former SEC Chair Jay Clayton confirmed that he has been appointed as the interim US Attorney for the Southern District of New York after the Democratic Party’s Senate leader used a “blue slip” to block a vote confirming Clayton’s position.
The appointment comes a little over five months after US President Donald Trump nominated Clayton to take on the role. He replaces Damian Williams, who played a major role in the conviction of former FTX CEO Sam Bankman-Fried and other high-profile crypto cases.
Clayton said on April 22 his top priorities would be to protect public safety, ensure the integrity of the US financial system, defend national security interests and combat fraud, particularly against the elderly and most vulnerable.
The temporary nature of Clayton’s appointment resulted from Democrat Senate Minority Leader Chuck Schumer’s use of a blue slip to block Clayton’s confirmation on April 16, effectively preventing a Senate vote and official confirmation of his position.
Blue slips can be used by senators to block US attorney or district court judicial nominees in their home states.
Clayton is allowed to serve as interim US attorney for up to 120 days without Senate confirmation. After that, he will need to be approved in a Senate vote or receive a temporary extension of his interim status from Manhattan’s federal court.
Trump criticized Schumer’s move in an April 17 Truth Social post, pointing out that Clayton received bipartisan support in the Senate and that Clayton complied with all requests asked of him.
The interim status of Clayton’s position will last until around Aug. 20. The role will see him as the top law enforcement officer for New York’s Southern District, encompassing the counties of New York, Bronx, Westchester, Rockland, Putnam, Orange, Dutchess and Sullivan.
The Southern District of New York is the oldest federal court district in the US, and its location in the country’s financial epicenter means it often handles high-profile cases involving white-collar crime.
Clayton has shared mostly positive views on crypto
Clayton served as SEC chair between May 4, 2017, and Dec. 23, 2020, and brought 56 cases against crypto firms during his tenure.
Related: Oregon AG lawsuit against Coinbase calls XRP unregistered security
He stated in a December 2021 CNBC interview that he’s a “huge believer in crypto technology,” adding that “the efficiency benefits in the financial system and otherwise from tokenization are immense.”
Clayton has also praised Bitcoin (BTC) as a prominent store of value, but didn’t allow Bitcoin exchange-traded products during his time as SEC chair.
The first US Bitcoin investment product was approved in 2021 under former SEC Chair Gary Gensler.
Magazine: XRP win leaves Ripple and industry with no crypto legal precedent set
A lawyer representing one of the co-founders of crypto mining service Hashflare has addressed how their criminal case may move forward after the pair received “self-deport” letters from the US Department of Homeland Security (DHS).
In an April 11 filing in the US District Court for the Western District of Washington, Hashflare co-founders Sergei Potapenko and Ivan Turogin reported they had received a DHS letter directing them to “leave the United States” as part of a push by the Trump administration to effect mass deportations. The government letter contradicted orders from Judge Robert Lasnik, who restricted travel for Potapenko and Turogin as part of their bail conditions.
In February, the Estonian nationals pleaded guilty to conspiracy to commit wire fraud as part of a deal with authorities. Between 2015 and 2019, the two were responsible for defrauding Hashflare users out of more than $550 million. They also raised $25 million from investors in 2017, claiming they would establish a digital bank called Polybius. The firm was never created.
Indicted in October 2022, Potapenko and Turogin were arrested and held in Estonia before their extradition to the US in May 2024. Both have been free on bail since July 2024 but could face up to 20 years in prison each at sentencing.
Ordered to leave, forced to stay
“[Potapenko and Turogin each] got letters from DHS to their personal email saying ‘deport immediately,’” Reed Smith partner and defense counsel Mark Bini told Cointelegraph. “It caused some angst because [our client and his co-defendant], their conditions of release include that they comply with the law. And here you have this letter saying if you stay in the country, you’re breaking the law. And of course, their bail conditions say they can’t leave the Seattle area.”
Related: Russian Gotbit founder strikes $23M plea deal with US prosecutors
The DHS letters ordering certain people to “depart the United States immediately” were reportedly sent to thousands of immigrants who had used the government’s CBP One app to enter the country legally. However, some citizens reported receiving the same letter in US President Donald Trump’s attempts to effect deportations through his office.
Bini initially thought it was a possibility that the US government was suggesting that Potapenko or Turogin “self-deport” to Estonia after the Justice Department issued a memo hinting it would change its enforcement policy in criminal cases involving crypto. The Hashflare co-founders had been expected to remain in the jurisdiction until at least Aug. 14 for their sentencing hearings.
“I have not encountered this situation before, where you have essentially two folks in the federal government telling you conflicting things,” said Bini.
The attorney added that Potapenko or Turogin now carried letters with them at all times that stated DHS had deferred action on their “self-deportation” for one year in the event that authorities mistakenly tried to detain them and remove them from the country. Though the pair could still receive prison time, Potapenko, Turogin and Hashflare reported returning $400 million in crypto payments to users and “agreed to forfeit their interests in assets that the government froze in 2022.”
“We’re going to try and convince the judge to frankly side with DHS and let them self-deport to Estonia to their families because we believe that there was no actual financial harm to the customers of Hashflare,” said Bini. “It’s a weird [case] because for our clients, we want to be deported. Our clients are Estonian. Their families are Estonian.”
Magazine: XRP win leaves Ripple and industry with no crypto legal precedent set
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