The “routine” housing of unaccompanied child asylum seekers in hotels by the Home Office is unlawful, the High Court has ruled.
The charity, Every Child Protected Against Trafficking (ECPAT), brought legal action against the Home Office over the practice of housing unaccompanied youngsters in Home Office hotels – claiming the arrangements are “not fit for purpose”.
In his ruling, Mr Justice Chamberlain said the use of hotels for unaccompanied asylum-seeking children has become unlawful.
He told the court the power to place children in hotels “may be used on very short periods in true emergency situations”.
The judge added: “It cannot be used systematically or routinely in circumstances where it is intended, or functions in practice, as a substitute for local authority care.”
He said the use of hotels cannot be seen as an “emergency” measure given the length of their use.
“From December 2021 at the latest, the practice of accommodating children in hotels, outside local authority care, was both systematic and routine and had become an established part of the procedure for dealing with unaccompanied asylum-seeking children,” the judge said.
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“From that point on, the home secretary’s provision of hotel accommodation for unaccompanied asylum-seeking children exceeded the proper limits of her powers and was unlawful.
“There is a range of options open to the home secretary to ensure that unaccompanied asylum-seeking children are accommodated and looked after as envisaged by parliament. It is for her to decide how to do so.”
Image: Home Secretary Suella Braverman’s provision of hotels for asylum-seeking children ‘was unlawful’, the judge ruled
Kent County Council acting unlawfully in failing to accommodate children
ECPAT’s bid was heard in London alongside similar claims brought by Brighton and Hove City Council and Kent County Council against the department.
The Home Office and Department for Education had opposed the legal challenges and said the hotel use was lawful but was “deployed effectively as a ‘safety net’ and as a matter of necessity”.
As well as finding the Home Office’s use of hotels to house child asylum seekers unlawful, the judge said Kent County Council is acting unlawfully in failing to accommodate and look after unaccompanied asylum-seeking children.
He said: “In ceasing to accept responsibility for some newly arriving unaccompanied asylum seeking children, while continuing to accept other children into its care, Kent County Council chose to treat some unaccompanied asylum seeking children differently from and less favourably than other children, because of their status as asylum seekers.”
The court heard at the time of the hearing in the claims earlier this month, 154 children remained missing from the hotels, including a 12-year-old.
The judge said: “Neither Kent County Council nor the home secretary knows where these children are, or whether they are safe or well. There is evidence that some have been persuaded to join gangs seeking to exploit them for criminal purposes.
“These children have been lost and endangered here, in the United Kingdom. They are not children in care who have run away. They are children who, because of how they came to be here, never entered the care system in the first place and so were never ‘looked after’.”
The judge added: “Ensuring the safety and welfare of children with no adult to look after them is among the most fundamental duties of any civilised state.”
Patricia Durr, chief executive of ECPAT, said following the ruling: “It remains a child protection scandal that so many of the most vulnerable children remain missing at risk of significant harm as a consequence of these unlawful actions by the Secretary of State and Kent County Council.”
A Home Office spokesperson said: “The High Court has upheld that local authorities have a statutory duty to care for unaccompanied asylum-seeking children. We have always maintained that the best place for unaccompanied children to be accommodated is within a local authority.
“However, due to the unsustainable rise in illegal Channel crossings, the government has had no option but to accommodate young people in hotels on a temporary basis while placements with local authorities are urgently found.”
Stablecoin issuer Circle has secured regulatory approval to operate as a financial service provider in the Abu Dhabi International Financial Center, deepening its push into the United Arab Emirates.
In an announcement Tuesday, Circle Internet Group said it received a Financial Services Permission license from the Financial Services Regulatory Authority of the Abu Dhabi Global Market (ADGM), the International Financial Centre of Abu Dhabi. This allows the stablecoin issuer to operate as a Money Services Provider in the IFC.
The USDC (USDC) issuer also appointed Saeeda Jaffar as its managing director for Circle Middle East and Africa. The new executive also serves as a senior vice president and group country manager for the Gulf Operation Council at Visa and will be tasked with developing the stablecoin issuer’s regional strategy and partnerships.
Circle co-founder, chairman and CEO Jeremy Allaire said that the relevant regulatory framework “sets a high bar for transparency, risk management, and consumer protection,” adding that those standards are needed if “trusted stablecoins” are going to support payments and finance at scale.
The newly introduced Federal Decree Law No. 6 of 2025 brings DeFi platforms, related services and infrastructure providers under the scope of regulations if they enable payments, exchange, lending, custody, or investment services, with licenses now required. Local crypto lawyer Irina Heaver said that “DeFi projects can no longer avoid regulation by claiming they are just code.”
Crypto companies seeking a US federal bank charter should be treated no differently than other financial institutions, says Jonathan Gould, the head of the Office of the Comptroller of the Currency (OCC).
Gould told a blockchain conference on Monday that some new charter applicants in the digital or fintech spaces could be seen as offering novel activities for a national trust bank, but noted “custody and safekeeping services have been happening electronically for decades.”
“There is simply no justification for considering digital assets differently,” he added. “Additionally, it is important that we do not confine banks, including current national trust banks, to the technologies or businesses of the past.”
The OCC regulates national banks and has previously seen crypto companies as a risk to the banking system. Only two crypto banks are OCC-licensed: Anchorage Digital, which has held a charter since 2021, and Erebor, which got a preliminary banking charter in October.
Crypto “should have” a way to supervision
Gould said that the banking system has the “capacity to evolve from the telegraph to the blockchain.”
He added that the OCC had received 14 applications to start a new bank so far this year, “including some from entities engaged in novel or digital asset activities,” which was nearly equal to the number of similar applications that the OCC received over the last four years.
Comptroller of the Currency Jonathan Gould giving remarks at the 2025 Blockchain Association Policy Summit. Source: YouTube
“Chartering helps ensure that the banking system continues to keep pace with the evolution of finance and supports our modern economy,” he added. “That is why entities that engage in activities involving digital assets and other novel technologies should have a pathway to become federally supervised banks.”
Gould brushes off banks’ concerns
Gould noted that banks and financial trade groups had raised concerns about crypto companies getting banking charters and the OCC’s ability to oversee them.
“Such concerns risk reversing innovations that would better serve bank customers and support local economies,” he said. “The OCC has also had years of experience supervising a crypto-native national trust bank.”
Gould said the regulator was “hearing from existing national banks, on a near daily basis, about their own initiatives for exciting and innovative products and services.”
“All of this reinforces my confidence in the OCC’s ability to effectively supervise new entrants as well as new activities of existing banks in a fair and even-handed manner,” he added.
The US Commodity Futures Trading Commission has issued updated guidance for tokenized collateral in derivatives markets, paving the way for a pilot program to test how cryptocurrencies can be used as collateral in derivatives markets.
Collateral in derivatives markets serves as a security deposit, acting as a guarantee to ensure that a trader can cover any potential losses.
The digital asset pilot, announced by CFTC acting chairman Caroline Pham on Monday, will allow futures commission merchants (FCM) — a company that facilitates futures trades for clients — to accept Bitcoin (BTC), Ether (ETH) and Circle’s stablecoin USDC (USDC) for margin collateral.
Pham said in a statement that the pilot program also “establishes clear guardrails to protect customer assets and provides enhanced CFTC monitoring and reporting.”
As part of the pilot, participating FCMs will be subject to strict reporting criteria, which require weekly reports on total customer holdings and any significant issues that may affect the use of crypto as collateral.
The CFTC’s Market Participants Division, Division of Market Oversight, and Division of Clearing and Risk also issued updated guidance on the use of tokenized assets as collateral in the trading of futures and swaps.
The guidance covers tokenized real-world assets, including US Treasury’s money market funds, and topics such as eligible tokenized assets, legal enforceability, segregation and control arrangements.
Pham said in an X post on Monday that the “guidance provides regulatory clarity and opens the door for more digital assets to be added as collateral by exchanges and brokers, in addition to US Treasurys and money market funds.”
The Market Participants Division also issued a “no-action position” on specific requirements regarding the use of payment stablecoins as customer margin collateral and the holding of certain proprietary payment stablecoins in segregated customer accounts.
A CFTC Staff Advisory that restricted FCMs’ ability to accept crypto as customer collateral, Staff Advisory 20-34, was also withdrawn because it is “outdated and no longer relevant,” in part due to the GENIUS Act.
Crypto execs back CFTC move
Several crypto executives applauded the move by the CFTC.
Katherine Kirkpatrick Bos, the general counsel at blockchain company StarkWare, said the use of “tokenized collateral in the derivatives markets is MASSIVE.”
“Atomic settlement, transparency, automation, capital efficiency, savings. Feels abrupt but who recalls the tokenization summit in 2/24, a glimmer of hope in the darkness,” she said.
Coinbase chief legal officer Paul Grewal also supported the action, calling Staff Advisory 20-34 a “concrete ceiling on innovation.”
“It relied on outdated info, went well beyond the bounds of regulation and frustrated the goals of the PWG.”
Salman Banaei, the general counsel at layer-1 blockchain the Plume Network, said it was a “major move” by the CFTC, and another push toward wider adoption.
“This is a step toward the use of onchain infra to automate settlement for the biggest asset class in the world: OTC derivatives, swaps,” he added.