Rachel Reeves signals first budget will be painful mix of spending cuts, tax rises and higher borrowing

Published

8 months ago

September 11, 2024

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Chancellor Rachel Reeves has signalled her first budget as chancellor could be a painful mix of spending cuts, tax rises and increased borrowing.

Speaking to Sky News after official figures showed the economy flatlined in July with GDP growth of 0.0%, she refused to rule out increasing business and wealth taxes, or further cuts to already strained departmental budgets, as she seeks to address what she says is a dire economic inheritance from the last government.

“I’ve been really honest that there are difficult decisions to come in the budget, on spending, on taxation and welfare, after the mess that the previous government created with the public finances and the state that they are in, that was inevitable,” she said.

“I was clear during the election campaign that, if I became chancellor of the exchequer, tough choices lie ahead.”

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Ms Reeves has ruled out increasing personal income taxes, National Insurance and VAT as well as corporation tax, leaving a limited field of other taxes on private wealth and business.

She said her choices in the budget would be directed at getting a grip on the public finances.

“It is important to bring stability back to our economy, but we will do that in a way that helps promote growth, so we can grow our economy and make our country better off,” she said.

The need to stimulate growth was emphasised by the figures from the Office for National Statistics that showed the economy stalled in June and July, consecutive months of zero expansion, after above-expectation growth in the first half of the year.

The new administration has pinned its entire programme for government on stimulating growth to allow public spending to increase and stay within strict fiscal rules limiting borrowing.

At the same time, they are imposing new obligations on businesses including a slate of workers’ rights reforms that industries fear will increase costs.

Ms Reeves cited an £8bn investment by Amazon Web Services in new data centres as evidence that businesses back her vision.

“Microsoft are investing £8bn here in Britain to create new jobs in technical skills, in AI and digital infrastructure,” she said.

“They’re making those investments, and other businesses too, because this government is bringing stability back to our economy and working in partnership with business to unlock the huge potential. And if we can do that, we can make our country better off.”

The chancellor also defended her decision to remove winter fuel payments from 10 million pensioners, after the government weathered a 50-strong rebellion by its own MPs in a parliamentary vote last night.

She said it was a response to a £22bn “black hole” in public finances for this year that had to be addressed, and that the loss of up to £300 would be compensated by rising pensions.

“These were not decisions that I wanted to make, but they were the right decisions in the circumstances that we faced,” she said.

“All pensioners this winter have benefited from the increase in the new state pension, which means pensions are worth £900 more than they were a year ago. The state pension is likely to go up by a further £460 next year. That’s not means-tested.

“So we are protecting the most vulnerable pensioners, whilst also starting to get a grip on our public financing years of mismanagement because we expect.”

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The chancellor also suggested more cuts to public services are likely.

Asked if the prisons and justice system could absorb further cuts despite having to release thousands of prisoners early, she said: “On spending, on taxation and on welfare, but those decisions are necessary to start to get a group of our public finances so that we can turn our economy around.

“I am determined not to allow these problems to continue to fester in the way that the previous government allowed that we’re honest about the challenges that we face.”

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Wintermute opens New York office, citing improved US crypto rules

Published

2 hours ago

May 15, 2025

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Wintermute opens New York office, citing improved US crypto rules

Wintermute, a London-based algorithmic crypto trading and market-making firm, has opened an office in New York as part of its expansion into the US.

Wintermute announced the opening of its New York office on May 15, citing improved regulatory conditions in the world’s largest economy.

“As the US takes a friendlier stance on digital assets and institutional adoption accelerates, we moved quickly to establish roots in New York City,” the company wrote in a May 15 X post, adding that the local presence will help them in “contributing to the future regulatory framework.”

“We’re eager to continue our growth and play an integral role in the U.S. market,” according to Evgeny Gaevoy, CEO of Wintermute. “As a neutral player with deep expertise in all areas of digital assets, we believe we are well-positioned to lend our expertise on Capitol Hill.”

As part of the firm’s expansion, Wintermute has appointed Ron Hammond as its new head of policy and advocacy, who brings “ten years of experience shaping crypto policy on Capitol Hill,” the company also announced.

Hammond was previously the senior director of government relations and institutional engagement at the Blockchain Association and the policy lead for US Representative Warren Davidson.

Hammond also authored the Token Taxonomy Act of 2021, the first bipartisan-supported crypto regulatory bill in the US.

Increasingly more crypto firms have expanded into the US since President Donald Trump took office on Jan. 20 after winning the 2024 presidential election.

During his campaign, Trump signaled that his administration intends to make crypto policy a national priority, bolstering expectations for more innovation-friendly crypto regulations for the next four years.

At least eight large crypto firms have announced their expansion in the US so far this year, banking on growing regulatory clarity. These include Binance.US, eToro, OKX exchange, Nexo, Circle, Crypto.com and a16z, Cointelegraph reported on May 11.

Wintermute met with SEC Crypto Task Force

Wintermute said it aims to contribute to the emerging regulatory framework in the US.

“We’ve already met with the SEC Crypto Task Force and will continue offering technical input and contributing to key legislative efforts,” the company said, adding that these are “essential for continued institutional participation.”

Meanwhile, crypto industry participants await progress on the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act.

The STABLE Act passed the House Financial Services Committee in a 32–17 vote on April 2 and currently awaits scheduling for debate and a floor vote in the House of Representatives.

However, a second piece of key stablecoin legislation, the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act, initially failed to garner enough support from Democrats on May 8, prompting at least 60 top crypto founders to gather in Washington, DC, to show support.

Despite the stalled stablecoin legislation, “momentum toward regulatory clarity remains active in both chambers,” Nexo dispatch analyst Iliya Kalchev told Cointelegraph.

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Tether blacklist delay allowed $78M in illicit USDT transfers: Report

Published

2 hours ago

May 15, 2025

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Tether blacklist delay allowed M in illicit USDT transfers: Report

A lag in Tether’s wallet blacklisting process allowed over $78 million in illicit funds to be moved before enforcement actions took effect, according to a new report from blockchain compliance company AMLBot.

Tether’s address blacklisting becomes effective only after a considerable delay from when the process is initiated on Ethereum and Tron, according the report published May 15.

“This delay originates from Tether’s multisignature contract setup on both Tron and Ethereum, transforming what should be an immediate compliance action into a window of opportunity for illicit actors,“ the report reads.

Tether’s blacklisting procedure is a multi-step process with a first transaction effectively warning of the upcoming blacklisting. First, a Tether administrator multisignature transaction submits a pending call to “addBlackList” on the USDT-TRC20 contract.

This results in a public “submission” of the target address as a blacklist candidate. This is followed by a second multisignature transaction confirming the submission, resulting in an “AddedBlackList” emission, making the blacklisting effective.

A warning on incoming blacklisting

In one example shared with Cointelegraph, an onchain transaction submitting a Tron address as a blacklist candidate took place at 11:10:12 UTC. The second transaction that actually enforced the action did not occur until 11:54:51 UTC on the same day, a 44-minute delay.

In practice, this delay can be treated by owners of USDt about to be blacklisted as a notice to move their assets to avoid them being frozen. The report stated:

“This delay between a freeze request and its on-chain execution creates a critical attack window, allowing malicious actors to front-run enforcement and move or launder funds before the freeze takes effect.“

Tether blacklist delay allowed $78M in illicit USDT transfers: Report — *Example of USDt blacklisting transactions. Source: AMLBot*

The report says that “for blockchain-savvy attackers, these delays are golden.” By tracking Tether’s calls in real time, a fraudster can be instantly alerted that their address is being targeted. When asked by Cointelegraph whether the delay is a technical limitation or just a delay in the actions of a multisignature wallet key holder, AMLBot researchers said that they cannot determine it without knowledge of Tether’s internal procedures.

In a statement to Cointelegraph, a Tether spokesperson explained that “while any delay in enforcement should be examined, the idea that this represents a systemic loophole is both misleading and lacking perspective.” According to the company, it collaborates with Law Enforcement to freeze addresses on a daily basis.” The statement continues:

“Tether operates on public blockchains, where all activity is visible — unlike fiat currencies that move in secret through traditional banks. This transparency allows Tether, in collaboration with over 255 law enforcement agencies across 55 countries, to track, trace, and freeze illicit funds faster than most realize.“

Tether representatives also cited one case when they were able to freeze 106,000 USDT tied to the ByBit hack, whereas Circle took much longer to freeze 115,000 USD Coin (USDC). The discrepancy was pointed out by pseudonymous sleuth ZachXBT in an X post answering the Circle CEO CEO Jeremy Allaire.

Tether’s spokesperson explained that “the delay cited in the report stems from our multi-signature governance model, designed to prevent unilateral freezes and protect the integrity of our system.” They admit that this introduces a delay, “but it’s a trade-off for responsible responsiveness to a $100+ billion ecosystem” and improvements are on the way:

“We are actively refining this process to work to eliminate any potential advantage for bad actors. If you think you can use Tether to move illicit funds, think again.“

Not just theoretical

AMLBot said its data shows that over $28.5 million in USDT was withdrawn during the delay between the two transactions on the Ethereum blockchain. This amount of freeze avoidance occurred between Nov. 28, 2017, and May 12, 2025. The average amount moved during the delay exceeded $365,000.

Similarly, $49.6 million was reportedly withdrawn during freeze delay windows on the Tron blockchain, resulting in a total on Ethereum and Tron of $78.1 million. Exploiting this delay on Tron is not particularly rare, according to AMLBot:

“170 out of 3,480 wallets (4.88%) on Tron blockchain exploited the lag before getting blacklisted. Each of these wallets made 2–3 transfers during the delay, withdrawing: Average: $291,970.“

A Tether spokesperson told Cointelegraph that “the $76 million referenced in this report should be put in context of the more than $2.7 billion in USD₮ that Tether has successfully frozen and blocked to date.” They added

Tether has previously promoted its ability to freeze assets as a compliance feature. In 2024, Tether, Tron, and analytics firm TRM Labs cooperated to freeze over $126 million in USDT linked to illicit activity.

Still, the AMLBot report raises questions about the effectiveness and speed of those enforcement actions.

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