While the cry for crypto regulation is becoming ever louder in much of the world, and regulation by enforcement is a controversy, a report prepared for the New Zealand Parliament has recommended a slow, agile approach. The report was commissioned by the Finance and Expenditure Committee of the New Zealand House of Representatives in 2021 and titled “Inquiry into the current and future nature, impact, and risks of cryptocurrencies.”
Cowritten by a partner at the law firm MinterEllisonRuddWatts and a University of Auckland associate professor of commercial law, the 99-page report considered previously solicited public comments and offered 22 recommendations. It took a favorable view of digital assets and blockchain technology as a whole.
In spite of challenges such as volatility, environmental impact and criminal usage, the report cautioned against excessive restrictions, saying they would “reduce the viability and competitiveness of such businesses as purchasers increasingly make payments in cryptocurrencies.”
It also cautioned against trying to regulate too early:
“Creating and implementing an integrated [regulatory] framework would be a complicated endeavour. […] Based on our understanding, agencies are not resourced or equipped to manage this.”
“Instead, we recommend that problems are addressed as they arise. We recommend that the Government and regulators create coherent and consistent guidance on the treatment of digital assets under current law,” the report added. Legislators can observe regulatory progress in the United States, United Kingdom and Australia before making local decisions.
“Because it is early in the development of digital assets and blockchain, we recommend that the Government and regulatory agencies proceed carefully and do not design and implement a fully integrated and consistent regulatory framework for digital assets at this point in time.… pic.twitter.com/A8uDtX3yZK
Some regulatory measures are unavoidable. The report recommends the Financial Markets Authority (FMA) create a new class of investment for digital assets, with a sandbox, and a new class of personal property. In addition, the report proposes the FMA lead a new Council of Financial Regulators subcommittee to provide advice and a coordinated response to “issues facing the industry.”
A larger working group with representatives from all government agencies concerned — police, tax authorities, the central bank and others — should be formed to work with the digital asset industry. Central bank digital currency research should continue, the report concluded.
Sir Keir Starmer has rejected the comparison to Enoch Powell after he said the UK was at risk of becoming an “island of strangers” if migration does not come down.
The prime minister’s official spokesperson said migrants have made a “massive contribution” to society but the Tories “lost control of the system” and that is the point he was making.
In the speech, Mr Powell imagined a future multicultural Britain where the white population would find themselves “strangers in their own country” as a result of migration.
Among those to make the comparison was the former shadow chancellor John McDonnell, who said on X that “Talk of an “island of strangers” shockingly echoes the divisive language of Enoch Powell”.
However, the prime minister’s spokesperson said: “The PM rejects this comparison. He said that migrants have made a massive contribution to society.
“It is also right to say that between 2019 and 2024, the previous government lost control of the system. Migration needs to be controlled, fair and people that come here should integrate.”
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Image: Enoch Powell. Pic: PA
Asked why the prime minister used such robust language, the spokesperson said he was not going to “shy away” from the issue of immigration and the British public want it to be reduced.
He added: “We have welcomed immigrants for decades, but it’s too high and must come down. Also, it’s important for our domestic skills system, which is good for our economy.”
What has the government announced?
Sir Keir made the comment at a news conference in which measures were announced to curb net migration, including banning care homes from recruiting overseas, new English language requirements for visa holders and stricter rules on gaining British citizenship.
The package is aimed at reducing the number of people coming to the UK by up to 100,000 per year, though the government has not officially set a target.
Who was Enoch Powell?
Enoch Powell was a Tory MP and the shadow defence secretary in the 1960s when a debate was raging about post-war immigration to Britain.
By the late 1960s, hundreds of thousands of Commonwealth citizens had exercised their legal right and settled in Britain, and it led to a quiet clampdown by the Labour government on immigration.
On 20 April 1968, Powell rose to his feet at a meeting of the Conservative Political Centre in Birmingham and declared Britons had “found themselves made strangers in their own country”.
Powell went on to say it had led to a shortage of hospital beds, school places, and “homes and neighbourhoods changed beyond recognition”.
He was swiftly kicked out of the shadow cabinet.
Net migration – the difference between the number of people immigrating and emigrating to a country – soared when the UK left the EU in January 2020.
It reached 903,000 in the year to June 2023 before falling to 728,000 in mid-2024. But that is still well above its pre-Brexit high of 329,000 in the year up to June 2015.
Sir Keir said parts of the UK’s economy “seem almost addicted to importing cheap labour” rather than investing in skills at home.
However, it is not clear how the government plans to boost the domestic workforce, amid a UK skills shortage and record numbers of people being out of work.
According to the ONS, there are 9.2 million people of working age in the UK who are economically inactive, including 1.8m 18-24 year olds.
The prime minister’s spokesperson said the government is “focused on upskilling British workers” and “especially helping young people in the job sector” but did not elaborate how.
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PM’s ‘tough’ migration policies explained
On care homes, he said, around 40,000 care workers came over on visas for jobs that did not exist, and companies can recruit from that pool.
Earlier, a number of Labour MPs came to the prime minister’s defence. Rother Valley MP Jake Richards said on X that Sir Keir is “absolutely right to warn of the risk of becoming an ‘island of strangers’.
“Millions of people across the country have similar concerns. This theme must be central to missions across immigration, employment, work and tackling neighbourhood deprivation,” he said.
However former Labour home secretary Lord David Blunkett criticised the rhetoric, saying in a speech at a University of Law graduation ceremony: “I never felt I lived in, or had a part to play in, a country of strangers.
“I thought welcoming people from across the world was a tribute to our society, where people want to make their homes, to build a life and their economy and to contribute to our society.
“I think we need to be kind to each other, but we need a much kinder national world as well.”
Sir Keir Starmer is getting used to falling out with some of his MPs over policy decisions – be it on the winter fuel allowance, his approach to the Israel-Hamas war in Gaza or welfare cuts.
But on Tuesday the prime minister found himself embroiled in a row with MPs over something entirely different – his language over immigration.
The prime minister’s argument that Britain “risked becoming an island of strangers” if immigration levels are not cut has sparked a backlash from some of his MPs, and the London mayor Sadiq Khan is alarmed that his own leader is using language similar to that of Enoch Powell.
In his infamous 1968 Rivers Of Blood speech, Powell warned of a future where white people “found themselves made strangers in their own country”.
It was a speech that cost him his shadow cabinet job and made Powell one of the most divisive and controversial politicians in Britain. It is also a speech that the prime minister’s team is now frantically trying to distance itself against, with one insider telling me on Tuesday the PM’s team hadn’t realised the similarity and hadn’t intended the comparison.
The politician the prime minister was trying to channel was about as far away from Powell as you could get in the 1960s, when the debate of immigration and race relations raged. Sir Keir had wanted to echo former Labour home secretary Roy Jenkins who had always argued that immigration was good for Britain, but needed to be done at a speed the country could absorb.
Take this from Jenkins in the House of Commons in 1966: “Let there be no suggestion that immigration, in reasonable numbers, is a cross that we have to bear, and no pretence that if only those who have come could find jobs back at home our problems would be at an end.
“But it does not follow that we can absorb them without limit. We have to strike a balance. That is what we are trying to do and I feel that we have been reasonably successful in recent months. We cannot lay down absolute numerical quantities, but I think that we have struck a reasonable balance and also that in the past year we have made substantial progress towards producing a healthier atmosphere, in terms of integration, on both sides – amongst both the indigenous and the immigrant community.”
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PM’s ‘tough’ migration policies explained
One person familiar with No 10’s approach told me: “We want a more cohesive society, we are not trying to pick fights.
“But the last Conservative government let in 2.3 million immigrants [in the three years to June 2024] and during that time built about 600,000 homes. That creates competition between people and that is typically at the lower end of the market. Just issuing visas and creating a sense of an unfair system is not a way to build cohesiveness.”
If you look at polling from YouGov, it seems the prime minister is more in step with public mood than those in his party criticising him, with 41% of all voters polled on Tuesday about his “island of strangers” remarks agreeing with the sentiment and having no issue with the language.
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‘We need to reduce immigration’
But it is true too that Labour’s approach lands particularly well with Reform voters, with 61% of them supportive of the PM’s words.
Beyond the battle of language, there will be battles ahead too over whether the prime minister’s policies will help or hinder the economy.
There has long been an assumption that higher net migration is positive of the economy and public finances, but there is growing concern in Number 10 that the benefits are being overstated, as it fails to take into account the additional resources needed for public services and the effect of lowering wages, which affects productivity growth – none of which is factored into the economic forecasts of the Office of Budget Responsibility.
There will be those in business that don’t like the cuts to visas. There will be those in government that will worry about the economic impact of cuts to visas – although the chancellor was on the front row for the prime minister’s speech on Monday. There will be those on the Labour left that will be uncomfortable about it.
I suspect the prime minister will be uncomfortable about the row over his language that has seen him attacked on both sides, as the left accuse him of trying to ape the far right and his opponents accuse him of being a “chameleon” for making the opposite argument on immigration when he was running for the Labour leadership in 2020.
But where his team think they are right is on the policy, and early polling suggests that voters from across the political divide broadly agree.
Defense lawyers have asked a judge to sentence the person responsible for helping post a fake message announcing regulatory approval of Bitcoin exchange-traded funds to roughly a year in prison, countering prosecutors’ request for a two-year sentence.
In a May 13 filing in the US District Court for the District of Columbia, Eric Council Jr.’s legal team asked that he be sentenced to no more than one year and one day in prison following his guilty plea.
Council was part of a group that took control of the US Securities and Exchange Commission’s (SEC’s) X account in 2024 through a SIM swap attack, posting a message that suggested the regulator had approved spot Bitcoin (BTC) exchange-traded fund listings for the first time.
“A sentence of twelve months and one day serves the ends of justice,” said the May 13 filing. “It sufficiently punishes the defendant for his role in this case. It also promotes respect for the law and deters future criminal conduct.”
Eric Council Jr.’s sentencing recommendation, filed on May 13. Source: PACER
Council initially pleaded not guilty to the charges, but changed his plea to guilty in February on one count of conspiracy to commit aggravated identity theft and access device fraud. The judge overseeing the case, Amy Berman Jackson, also ordered prosecutors to “identify the felony and point to where that information can be found in the record” by May 13.
Prison sentence between 1 and 2 years?
The SEC hacker is scheduled to be sentenced on May 16. Prosecutors asked the judge to impose a two-year sentence on Council, saying he “profited through a sophisticated fraud scheme.” Court filings showed he earned roughly $50,000 through similar SIM swap attacks.
Though Council’s case was likely winding down with his upcoming sentencing hearing, the DC court district could soon be under new leadership, potentially affecting the prosecution of crypto-related cases. On May 8, US President Donald Trump announced that Fox News host Jeanine Pirro would become the interim US attorney for the District of Columbia.