Parliamentary researcher accused of spying for China says he is ‘completely innocent’
A parliamentary researcher who has been arrested on suspicion of spying for China has said he is “completely innocent”.
In a statement released by his lawyers, the man – who they did not name – said: “I feel forced to respond to the media accusations that I am a ‘Chinese spy’. It is wrong that I should be obliged to make any form of public comment on the misreporting that has taken place.
“However, given what has been reported, it is vital that it is known that I am completely innocent. I have spent my career to date trying to educate others about the challenge and threats presented by the Chinese Communist Party.
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“To do what has been claimed against me in extravagant news reporting would be against everything I stand for.”
On Monday afternoon, Commons Speaker Sir Lindsay Hoyle reassured MPs that the House “follows the same vetting procedures as the government” and parliamentary security “is working closely and effectively with other relevant authorities” – and keeping security arrangements under review.
Sir Lindsay said a small number of people were briefed about the arrest “on a strictly confidential basis” – and warned members against prejudicing future prosecutions by discussing the matter in the House.
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.
Scotland Yard said he was arrested in Edinburgh on 13 March.
The Sunday Times revealed that another man, who is in his 30s, was also arrested in Oxfordshire on the same day.
Sir Lindsay said the pair were bailed until early in October.
Officers from the Metropolitan Police’s Counter Terrorism Command, which oversees espionage-related offences, are investigating.
Both men were held on suspicion of offences under section one of the Official Secrets Act 1911, which punishes offences that are said to be “prejudicial to the safety or interests of the state”.
They have been bailed until early October.
Their arrests led to Rishi Sunak confronting Chinese premier Li Qiang at the G20 summit in India on Sunday over “unacceptable” interference in democracy.
The incident has also thrown a spotlight on the government’s stance towards China and raised questions about whether it should adopt a tougher approach.
The prime minister has sought to adopt a more diplomatic stance towards Beijing than some of the more hawkish members of his cabinet and party, who want China to be officially classified as a threat.
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PM raised ‘concerns’ with China
This morning Business Secretary Kemi Badenoch echoed Mr Sunak’s approach, saying China should not be considered a “foe” but a “challenge”.
Ms Badenoch said the claims of spying were an “extremely serious concern” but we “shouldn’t be using language that makes people scared”.
Asked whether China should be described as a threat, Ms Badenoch told Sky News: “I would define it as a challenge.”
Pressed on whether China should be described as a “friend or a foe”, she replied: “We certainly should not be describing China as a foe – but we can describe it as a challenge.
“I don’t think we should be careless in terms of how we speak about other countries when these sorts of things happen.”
But former Lord Chancellor and Foreign Secretary Philip Hammond told Sky News that in his view, the UK should approach China “with our eyes wide open”.
“It’s not a surprise to me this morning and I hope it’s not a surprise to many people that China is spying on us,” he said.
He said “many people” were spying on the UK and that the government needed to be “robust in our response”.
But he added: “That doesn’t mean we should cut trade and investment ties, that we should simply go into a defensive crouch.”
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China denies spying against UK
The Chinese embassy in London issued a statement yesterday in which it described the incident as “completely fabricated” and “nothing but a malicious slander”.
It also urged Britain’s lawmakers to “stop anti-China political manipulation”.
Read more:
How worried should we be about Chinese ‘spying’ in parliament?
Has China’s economy run out of steam?
Labour’s shadow home secretary, Yvette Cooper, claimed security services warned about the dangers of spying “some time ago”.
She pointed to the “damning” report from the security and intelligence committee in July which said the government had “no strategy” to deal with China.
“We think there has to be a comprehensive strategy towards the risks, the challenges, and the threats from other states to our national security,” she said.
Asked if she believed China was a friend or foe, she said: “Well, the relationship is clearly complex.
“There are serious issues around the human rights abuses in China. There are serious issues around their approach and their role across the world. And we also have this trading relationship, as we’ve seen the rise of China. We have to deal with that. But in particular, we have to make sure we protect our own national security. That has to come first.”
US President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell, accusing him of being too slow to cut interest rates and escalating a long-running conflict that risks undermining the central bank’s political independence.
With the European Central Bank (ECB) cutting interest rates again on April 17, “Too Late” Powell has failed to act appropriately in the United States, even with inflation falling, Trump said on Truth Social on April 17.
“Powell’s termination cannot come fast enough!” Trump said.
Florida Senator Rick Scott agreed with the president, saying, “it’s time for new leadership at the Federal Reserve.”
Trump’s public criticism of the Fed breaks a decades-long convention in American politics that sought to safeguard the central bank from political scrutiny, which includes any executive decision to replace the chair.
In an April 16 address at the Economic Club of Chicago, Powell said Fed independence is “a matter of law.” Powell previously signaled his intent to serve out the remainder of his tenure, which expires in May 2026.
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Crypto, risk assets look to the Fed for guidance
The Federal Reserve wields significant influence over financial markets, with its monetary policy decisions affecting US dollar liquidity and shaping investor sentiment.
Since the COVID-19 pandemic, crypto markets have increasingly come under the Fed’s sphere of influence due to the rising correlation between dollar liquidity and asset prices.
This was further corroborated by a 2024 academic paper written by Kingston University of London professors Jinsha Zhao and J Miao, which concluded that liquidity conditions now account for more than 65% of Bitcoin’s (BTC) price movements.
As inflation moderates and market turmoil intensifies amid the trade war, Fed officials are facing mounting pressure to cut interest rates. However, Powell has reiterated the central bank’s wait-and-see approach as officials evaluate the potential impact of tariffs.
The Fed is expected to maintain its wait-and-see policy approach at its next meeting in May, with Fed Fund futures prices implying a less than 10% chance of a rate cut. However, rate cut bets have increased to more than 65% for the Fed’s June policy meeting.
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The Wyoming Stable Token Commission, a body authorized by the US state to issue a stablecoin, has suggested that it may clarify its language to better comply with potential guidelines from the Securities and Exchange Commission (SEC).
In an April 17 meeting in the extension of the Wyoming Capitol building, Commissioner Joel Revill suggested the body could reduce the risk of the state’s proposed WYST stablecoin qualifying as a security under SEC rules. The discussion among the commissioners and Executive Director Anthony Apollo followed the SEC issuing guidelines that certain “covered stablecoins” were considered” non-securities” and largely not subject to reporting requirements.
“We’re looking to kind of create our own vernacular around some of this, to clarify, and then use that as a jumping off point of discussion for the commission,” said Apollo, adding there were internal discussions regarding the SEC guidance but the commission was scheduled to address the matter in a May memo.
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The commission, established after Wyoming passed a law to issue a state-issued stablecoin pegged to the US dollar and redeemable for fiat currency, has been exploring issues surrounding WYST. Wyoming Governor Mark Gordon said in August that the government initially planned a launch in the first quarter of 2025 for the stablecoin, later amending the timeline to potentially launch in July.
Looking to the US Congress for guidance
The commission said it would be monitoring efforts by the federal government to establish a regulatory framework for stablecoins. Among the proposed legislation was the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act, in the Senate, and the Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act, in the House of Representatives.
Though Wyoming is the least populated US state, with roughly 600,000 people, it has become home to some crypto firms likely seeking a regulatory-friendly jurisdiction. Custodia Bank, the digital asset bank established by Caitlin Long, is based in Cheyenne. US Senator Cynthia Lummis, who often advocates for crypto-friendly policies, represents Wyoming in the Senate.
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Meta, the parent company of Facebook, Instagram, WhatsApp and Messenger, is facing antitrust proceedings that could limit its ability to develop AI amid a field of competitors.
First filed in 2021, the Federal Trade Commission (FTC) alleges that Meta’s strategy of absorbing firms — rather than competing with them — violates antitrust laws. If the court rules against Meta, it could be forced to spin out its various messenger services and social media sites into independent companies.
The loss of its stable of social media companies could harm Facebook’s competitiveness not only in the social media industry but also in its ability to train and develop its proprietary Llama AI models with data from those sites.
The trial could take anywhere from a couple of months to a year, but the outcome will have lasting consequences on Meta’s standing in the AI race.
Meta’s antitrust case and its effect on AI
The FTC first opened its complaint against Meta in 2020 when the firm was still operating as Facebook. The agency’s amended complaint a year later alleges that Meta (then Facebook) used an illegal “buy-or-bury” scheme on more creative competitors after its “failed attempts to develop innovative mobile features for its network.” This resulted in a monopoly of the “friends and family” social media market.
Meta founder and CEO Mark Zuckerberg had the chance to address these allegations on April 14, the first day of the official FTC v. Meta trial. He testified that only 20% of user content on Facebook and some 10% on Instagram was generated by users’ friends. The nature of social media has changed, Zuckerberg claimed.
“People just kept on engaging with more and more stuff that wasn’t what their friends were doing,” he said — meaning that the nature of Meta’s social media holdings was sufficiently diverse.
At the time of the FTC’s initial complaint, Meta called the allegations “revisionist history,” a claim it repeated on April 13 when it stated the agency was “ignoring reality.” The company has argued that the purchases of Instagram and WhatsApp have benefited users and that competition has appeared in the form of YouTube and TikTok.
If the District of Columbia Circuit Court rules against Meta, the global social media giant will be forced to unwind these services into independent firms. Jasmine Enberg, vice president and principal analyst at eMarketer, told the Los Angeles Times that such a ruling could cost Meta its competitive edge in the social media market.
“Instagram really is its biggest growth driver, in the sense that it has been picking up the slack for Facebook for a long time, especially on the user front when it comes to young people,” said Enberg. “Facebook hasn’t been where the cool college kids hang out for a long time.”
Such a ruling would also affect the pool of data from which Meta can draw to train its AI models. In July 2024, Meta halted the rollout of AI models in the European Union, citing “regulatory uncertainty.”
The pause came after privacy advocacy group None of Your Business filed complaints in 11 European countries against Meta’s use of public data from its platforms to train its AI models. The Irish Data Protection Commission subsequently ordered a pause on the practice until it could conduct a review.
Related: Meta’s Llama 4 puts US back in lead to ‘win the AI race’ — David Sacks
On April 14, Meta got the go-ahead to use public data — i.e., posts and comments from adult users across all of its platforms — to train the model. If these firms dissolved into separate companies, with their own organizational structures and data protection policies and practices, Meta would be cut off from an ocean of data and human communication with which its AI could be improved.
Andrew Rossow, a cyberspace attorney with Minc Law and CEO of AR Media Consulting, told Cointelegraph that in such an event, “companies would most likely control their own user data, and Meta would be restricted from using it unless new data-sharing agreements were negotiated, which would be subject to regulatory scrutiny and user/consumer privacy laws.”
However, Rossow noted that it wouldn’t be a total loss for Meta. Zuckerberg’s firm would retain the wealth of data from Facebook and Messenger. It could continue to use “opt-in” data from consumers who allow their posts to be used for AI training, and it could also employ synthetic data sets as well as third-party and open data.
Meta, the AI race and data protections
The race to unseat OpenAI and its ChatGPT model from AI dominance has grown more competitive in the last year as DeepSeek joined the fray and Meta launched the fourth iteration of its open-source Llama model.
In addition to training new models, major AI development firms are investing billions in new data centers to accommodate new iterations. In January 2025, Meta announced the construction of a 2-gigawatt data center with more than 1.3 million Nvidia AI graphics processing units.
Zuckerberg wrote in a post on Threads, “This will be a defining year for AI. In 2025, I expect Meta AI will be the leading assistant serving more than 1 billion people […] To power this, Meta is building a 2GW+ datacenter that is so large it would cover a significant part of Manhattan.”
His announcement followed the $500-billion Stargate project, which would see massive investment in AI development led by OpenAI and SoftBank, with Microsoft and Oracle as equity partners.
Related: Trump announces $500B AI infrastructure venture ‘Stargate’
Amid this competition, AI firms are looking for broader and more varied sources of data to train their AI models — and have turned to dubious practices in order to get the data they need. In order to stay competitive with OpenAI when developing its Llama 3 model, Meta harvested thousands of pirated books from the site LibGen. According to court documents in a case pending against Meta, Llama developers harvested data from pirated books because licensing them from sources like Scribd seemed “unreasonably expensive.”
Time was another perceived motivator for using pirated works. “They take like 4+ weeks to deliver data,” one engineer wrote about services through which they could purchase book licenses.
The practice is not limited to Meta. OpenAI has also been accused of mining data from pirated work hosted on LibGen.
Rossow suggested that, “to ensure lasting impact — beyond short-term profit,” Meta would do well to “prioritize investment in advanced data collection, rigorous auditing and the implementation of privacy-preserving and encryption-based technologies.”
By focusing on transparency and responsible practices, “Meta can continue to genuinely advance AI capabilities, rebuild and nurture long-term user trust, and adapt to evolving legal and ethical standards, regardless of changes to its platform portfolio.”
What a ruling for the FTC would mean
Litigation is now hitting tech firms from all sides as they face allegations of privacy violations, copyright law infringement and stifling competition. Major cases like those facing Google, Amazon and Meta that have yet to play out will decide how and whether these firms can proceed as they have, defining the guardrails for AI development as well.
Rossow said that the current antitrust case against Meta could decide how courts interpret antitrust law for tech firms, spanning tech mergers, data usage and market competition. It would also signal that courts are “willing to break up tech conglomerates” when issues of smothering competition are involved, while at the same time, “taking current precedent a step further in harmonizing it with the laws of cyberspace.”
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