Parliamentary researcher arrested for ‘spying for China’

Published

2 years ago

September 10, 2023

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Two men have been arrested under the Official Secrets Act amid reports that a parliamentary researcher spied for China.

The researcher has links to several senior Tory MPs and has been arrested on suspicion of spying for China, according to The Sunday Times.

He was arrested along with another man by officers on 13 March, the newspaper reported.

The researcher, who is in his 20s, is understood to have had links to security minister Tom Tugendhat, foreign affairs committee chairwoman Alicia Kearns and other senior Tory MPs.

The MPs he is linked to are privy to classified or highly sensitive information.

A senior Whitehall source told The Sunday Times: “This is a major escalation by China. We have never seen anything like this before.”

Officers from the Metropolitan Police’s Counter Terrorism Command, which oversees espionage-related offences, are investigating.

One of the men, in his 30s, was arrested in Oxfordshire on 13 March, while the other, in his 20s, was arrested in Edinburgh, Scotland Yard said.

“Searches were also carried out at both the residential properties, as well as at a third address in east London,” a statement from the force said.

Both men were held at a south London police station until being bailed until early October.

Mr Tugendhat is said not to have had any contact with the researcher since before he became security minister in September last year.

Ms Kearns declined to comment, adding: “While I recognise the public interest, we all have a duty to ensure any work of the authorities is not jeopardised.”

The Inter-Parliamentary Alliance on China pressure group said it was “appalled at reports of the infiltration of the UK Parliament by someone allegedly acting on behalf of the People’s Republic of China”.

Downing Street said it does not comment on security matters.

The House of Commons has been contacted.

Conservative MP Iain Duncan Smith has tweeted: “If true, this is very serious and of great concern. It shows that we cannot afford to be complacent about the threat that the CCP [Chinese Communist Party] poses to the function of Parliament and our democratic way of life.”

China has ‘penetrated the UK economy’

In July, the Intelligence and Security Committee (ISC) said China targets the UK “prolifically and aggressively” in a way that poses a “challenge” for British intelligence agencies.

The ISC, made up of cross-party MPs, published a report saying China had managed to “successfully penetrate every sector of the UK’s economy”.

In a separate case in January 2022, MI5 warned MPs that a Chinese government agent has been working in parliament “to subvert the processes”.

A letter was sent to MPs by Speaker Sir Lindsay Hoyle who said MI5 warned him a woman called Christine Lee has been “engaged in political interference activities on behalf of the Chinese Communist Party, engaging with members here at parliament”.

Lee, 59, who denies wrongdoing and is suing MI5, had donated almost £500,000 to Barry Gardiner, Labour’s former shadow international trade secretary.

Politics

How Nigel Farage is flirting with Labour’s most loyal voters – and the battle to stop him

Published

1 hour ago

May 6, 2025

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How Nigel Farage is flirting with Labour's most loyal voters - and the battle to stop him

For much of its history, the trade union movement’s main opponent has been the Conservative Party. But now it finds itself taking on a different type of adversary – one it might describe as a wolf in sheep’s clothing.

It began when Nigel Farage, known for being a staunch advocate of free trade and private markets, declined to criticise the Unite union for its bin strike in Birmingham, before calling for the nationalisation of British Steel following the near collapse of its plant in Scunthorpe.

The Reform UK leader has been sweet-talking the trade unions, speaking their language and brandishing their leaflets in public in what appears to his critics to be a new opportunistic strategy.

Farage’s courting of union members has alarmed the movement’s leaders – so much so that Sky News understands the executive of the Trades Union Congress (TUC), which represents unions across the country, has been holding meetings to draw up a strategy on how best to combat his appeal and more broadly, the far-right.

Over the weekend, as the two main parties were processing the battering they received in the local elections largely courtesy of Farage’s party, Unison’s general secretary Christina McAnea urged members of councils now controlled by Reform to join a union.

“Unions are there to ensure no one can play fast and loose with the law,” she said, after Farage threatened to sack staff working in areas such as diversity or climate change.

‘Political fraud’

Paul Nowak, the general secretary of the TUC, has begun to step up his criticism of the former UKIP leader – accusing him of “cosplaying as a champion of working people”.

“He is not on the side of the working people,” he tells Sky News. “He’s on the side of bad bosses who want to treat staff like disposable labour.

“Unions will continue to expose him for the political fraud he is.”

At the moment, that campaign is largely focused on highlighting Farage’s voting record – in particular his decision to oppose the Employment Rights Bill, legislation unions say they have wanted for decades.

The bill offers protection from unfair dismissal from the first day of employment and sick pay for all workers from the first day of absence, among other measures.

The TUC says the bill is incredibly popular – and not just among Labour voters.

According to a poll it conducted of more than 21,000 people with campaign group Hope Not Hate, banning zero hours contracts is supported by more than seven in 10 UK voters – including two in three Reform voters from the 2024 election.

“People are going to find there are improvements to their life and work,” an insider tells Sky News. “We want them to understand who was for it, and who was against it.”

The TUC has also begun promoting videos on social media in which workers in the electric vehicle industry accuse Farage of threatening their jobs.

Farage’s response to the bill has been to claim that a clause within in that gives workers protection from third party harassment could herald the end of “pub banter”.

‘There has always been fellow feeling with unions’

But Gawain Towler, an ex-Reform press officer who has worked on and off for Farage for 20 years, insists his former boss isn’t against workers’ rights – he’s just opposed to Labour’s bill.

“Reform don’t see it as a workers rights’ bill – we think it takes away opportunities for work because it scares people away from employing people,” he says.

He believes “mass migration” is the real obstacle to better wages and job security, and argues net zero policies are “costing union members their jobs”.

The government may point to a recent study suggesting the net zero sector has grown by 10% over the past year, supporting the equivalent of 951,000 full-time jobs.

For Farage’s allies, his courting of union members is neither disingenuous nor new.

“He’s anti-union management, he’s not anti-union,” says Towler, who noted Farage’s friendship with the late union leader and Brexit advocate Bob Crow.

“Nigel has always been a free trader, but he’s never been deeply partisan, which is why he was able to start the Brexit Party. There has always been that fellow feeling with unions.”

Indeed, on one issue, a commonality is emerging between Reform and the GMB union.

While general secretary Gary Smith has criticised Farage for being “soft on Russia” and for voting against the Employment Rights Bill, there is an agreement between the pair over the impact of net zero.

Those sceptical of the government’s plans for the green transition point to Port Talbot in Wales, where 2,500 workers are expected to lose their jobs, and Grangemouth, where the closure of Scotland’s last remaining oil refinery is expected to result in around 400 job losses.

Although Unite has no common truck with Reform, it has warned there should be “no ban without a plan” when it comes to issuing new oil and gas licences.

‘Labour has one shot with workers’

For some unions, Labour’s position on certain issues has provided Reform with an opening.

There’s disappointment at some Labour policies in government – from partly watering down the Employment Rights Bill to stave off dissent from business leaders, to welfare cuts and offering below-inflation pay rises for public sector workers.

Gawain Little, the general secretary of the General Federation of Trade Unions, tells Sky News the party risks leaving “space open for fakers like Farage to come along and pretend they have people’s interests at heart”.

Only a sense that austerity is over, likewise the cost of living crisis, will truly “challenge” the Reform leader, he says.

One GMB member says Farage’s strategy is “from the same playbook” as right-wing parties in Europe, such as the AfD in Germany and Georgia Meloni’s Brothers of Italy.

By “continuously legitimising” Reform by talking tough on migration, union activists who usually get the word out for Labour have been left demoralised.

Farage on the picket line?

The current distance with some unions did not start in government. It began in opposition, when Labour refused to back workers who were on strike and when the party did not endorse some candidates put forward by some of the more left-wing unions.

But so far, sources in Labour have dismissed Farage’s tactics as just words – and believe his previous anti-union rhetoric will weigh against him when he tries to court votes.

In fact, Mr Farage’s calls for the renationalisation of steel have been interpreted as him “trying to jump on the bandwagon” of Labour’s success.

However, Damian Lyons Lowe, the founder of pollster Survation, spots danger for Labour if Farage is able to successfully tilt in the direction of workers’ rights – especially if the government finds itself unable to follow.

He says taking the side of unions in an industrial dispute over pay would be an example of a classic “wedge” strategy that Farage can deploy to back Labour into a corner.

And given the government’s initial 2.8% pay offer to public sector workers is below that reportedly drawn up by the independent pay review body for NHS workers and teachers, there is the very real prospect this scenario could arise.

“It could pose a real threat to Labour,” Lyons Lowe says, with union members in “post-industrial” areas potentially receptive to a message of “protectionism, industrial revival, and national self-sufficiency”.

Could what started with Farage brandishing leaflets end up with him joining the picket line?

While one union insider doesn’t think Farage will ultimately convince union leaders, members may be tempted.

The Starmer government has “one shot to deliver for workers”, they warn.

“If they don’t, Farage and Reform are waiting in the wings.”

Politics

New crypto bill draft seen to curb big crypto firm influence

Published

2 hours ago

May 6, 2025

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New crypto bill draft seen to curb big crypto firm influence

The new “Digital Asset Market Structure Discussion Draft” introduced by House Republicans on May 5 could work to reduce the dominance of large crypto firms and promote more participation in the broader market, according to an executive from Paradigm.

The discussion draft, led by the House agricultural and financial services committee chairs Glenn Thompson and French Hill, is an “incremental, albeit meaningful, rewrite” of the Financial Innovation and Technology for the 21st Century Act (FIT21), Paradigm’s vice president of regulatory affairs Justin Slaughter said in a May 5 X post.

One of the major changes from FIT21 is that the draft defines an affiliated person as anyone who owns more than 1% of a digital commodity issued by the project — down from 5% in the FIT21 bill — a move Slaughter said may curb the influence of big crypto firms and lead to more participation in the crypto market.

“This is a portent of the entire bill. There are often criticisms of crypto being too dominated by a few large firms. This bill makes clear the regulatory regime proposed is going to push against that fact and strongly encourage more small-d ‘democratization’ of the space.”

The draft also defines a “mature blockchain system” as one that, together with its related digital commodity, is not under the “common control” of any person or group.

The Securities and Exchange Commission would be the main authority regulating activity on crypto networks until they become sufficiently decentralized, Slaughter noted.

The draft also clarified that decentralized finance trading protocols are those that enable users to engage in a financial transaction in a “self-directed manner.” Protocols that meet this criterion are exempt from registering as digital commodity brokers or dealers.

The draft also referred to digital commodities as “investment contract assets” to distinguish their treatment from stocks and other traditional assets under the Howey test.

According to Slaughter’s analysis, securities laws won’t be triggered unless the secondary sale of tokens also transfers ownership or profit in the underlying business.

Crypto firms would also have a path to raise funds under the SEC’s oversight while also having a “clear process” to register their digital commodities with the Commodity Futures Trading Commission, the committee members said in a separate May 5 statement.

Joint rulemaking, procedures, or guidelines related to crypto asset delisting must be established by the CFTC and SEC should a registered asset no longer comply with rules laid out by the regulators.

A ‘clear opportunity’ to advance crypto innovation, rules once and for all

Speaking about the need for a comprehensive crypto regulatory framework, the House committee members said crypto is a “clear opportunity” to advance innovation in the US — most notably through modernizing America’s financial infrastructure and reinforcing US dollar dominance.

The Republicans criticized the previous Biden administration and the Gary Gensler-led SEC for adopting a regulation-by-enforcement strategy rather than creating clear rules for market participants.

Many crypto firms were stuck in “legal limbo” as a result of the unclear rules, which pushed some industry players overseas, where clearer rules exist, the House committee members said.

“America needs to be the powerhouse for digital asset investment and innovation. For that to happen, we need a commonsense regulatory regime,” said Dusty Johnson, chairman of the subcommittee on commodity markets, digital assets and rural development.

Slaughter added: “This is the bill that will, finally, provide a clear regulatory regime on crypto that many have been calling for.”

Republicans already facing roadblocks over discussion draft

House Financial Services Committee Ranking Member Maxine Waters plans to block a Republican-led event discussing digital assets on May 6, a Democratic staffer told Cointelegraph.

The hearing, “American Innovation and the Future of Digital Assets,” is expected to discuss the new crypto markets draft discussion paper pitched by Thompson, Hill, and other committee members.

However, according to the unnamed Democratic staffer, the current rules require all members of the House Financial Services Committee to agree on such hearings.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Politics

Samourai Wallet says feds hid advice that crypto mixer was in the clear

Published

3 hours ago

May 6, 2025

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Samourai Wallet says feds hid advice that crypto mixer was in the clear

Samourai Wallet’s lawyers allege federal prosecutors suppressed advice that the firm didn’t need a license before they charged executives at the crypto mixing service months later.

In a May 5 letter to a Manhattan federal court, lawyers for Samourai co-founders Keonne Rodriguez and William Hill said prosecutors disclosed that the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) representatives told them six months before they charged the pair “that under FinCEN’s guidance, the Samourai Wallet app would not qualify as a ‘Money Services Business’ requiring a FinCEN license.”

“Shockingly, six months later, the same prosecutors criminally charged Keonne Rodriguez and William Hill with operating just such a business without a FinCEN license,” the lawyers added.

The letter claimed that prosecutors were required to share their discussions with FinCEN over Samourai two weeks after they unsealed charges, making the deadline May 8 last year, but instead “suppressed this information for over a year, disclosing it only on April 1, 2025.”

Prosecutors charged Samourai CEO Rodriguez and its technology chief Hill with conspiracy to operate an unlicensed money transmitting business and money laundering conspiracy in February 2024, unsealing the charges and arresting the pair in April that year.

Samourai’s mixing service took crypto from multiple users and blended it together to hide its origins. The government alleged the platform helped with over $2 billion in illegal transactions and facilitated over $100 million worth of money laundering transactions from online black markets and scammers.

Rodriguez and Hill both pleaded not guilty.

In the letter, their lawyers said prosecutors shared details of a call with Kevin O’Connor, chief of FinCEN’s Virtual Assets and Emerging Technology Section in the Enforcement and Compliance Division, and Policy Division staffer Lorena Valente.

According to an email from one of the prosecutors summarizing the call, FinCEN said that “because Samourai does not take ‘custody’ of the cryptocurrency by possessing the private keys to any addresses where the cryptocurrency is stored, that would strongly suggest that Samourai is NOT acting as an MSB [money services business].”

The email said O’Connor and Valente agreed that the government could try to argue that Samourai functionally controlled the crypto, “but that has never been addressed in the guidance, and so it could be a difficult argument” for prosecutors.

Samourai’s lawyers asked the court for a hearing “to determine the circumstances surrounding the Government’s late disclosure” and to administer a remedy.

Samourai to renew dismissal bid if case goes on

Rodriguez and Hill’s lawyers said that, using this latest information, they would again ask for the charges to be dismissed, arguing they lacked fair notice and “understood they were acting lawfully.”

Prosecutors and Samourai asked the court for more time on April 28 to consider potentially dismissing the case after the Justice Department rolled back its crypto enforcement.

Rodriguez and Hill bid to dismiss the case in early April, arguing it should be dropped as Deputy Attorney General Todd Blanche said in an April 7 memo that the Justice Department wouldn’t prosecute crypto mixers for “unwitting violations of regulations.”

In the latest letter, their lawyers said if the government “were to resist the Blanche Memo’s directive and push forward,” then they would bid to dismiss as “if they were not money transmitters under FinCEN’s guidance, then they could not possibly be prosecuted for not having a license.”

Magazine: Tornado Cash 2.0 — The race to build safe and legal coin mixers