Lammy confirms independent investigation into wrongful release of migrant sex offender
David Lammy has confirmed there will be an independent investigation into the accidental release of a migrant jailed for sex offences, as he blamed “human error” for the incident.
The deputy prime minister and justice secretary told MPs he was “livid” on behalf of Hadush Kebatu’s victims and he would be deported back to Ethiopia “as quickly as possible”.
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Kebatu, who was found guilty in September of sexually assaulting a 14-year-old girl and a woman in Epping, was freed in error from HMP Chelmsford in Essex on Friday instead of being handed over to immigration officials for deportation.
His accidental release sparked widespread alarm and a manhunt that resulted in him being found and arrested by the Metropolitan Police in the Finsbury Park area of London at around 8.30am on Sunday.
The incident has sparked questions over how the man, whose crimes sparked protests in Epping over the use of asylum hotels, was able to be freed.
Addressing MPS in the House of Commons, Mr Lammy said the mistake should not have happened as he sought to lay part of the blame on to the Conservatives over the state of the prison system over the past 14 years.
He said “there must and there will be accountability” for the mistaken release of Kebatu from prison.
“I’ve been clear from the outset that a mistake of this nature is unacceptable,” he said.
“We must get to the bottom of what happened and take immediate action to try and prevent similar releases in error to protect the public from harm.”
Mr Lammy said that he ordered an “urgent review” into the checks that take place when an offender is released from prison, and that new safeguards have been added that amount to the “strongest release checks that have ever been in place”.
The justice secretary said the investigation would be led by former Metropolitan Police deputy commissioner Dame Lynne Owens, who also used to lead the National Crime Agency.
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Witness describes confusion outside prison
He also said the investigation would have the same status as high-profile probes into other prison incidents, including the the attack on three prison officers at HMP Franklin in April of this year and the escape of Daniel Khalife from HMP Wandsworth in 2023.
‘Calamity Lammy’
Shadow justice secretary Robert Jenrick referred to a report by Sky News which detailed how a witness present at the prison observed Kebatu appearing “confused” upon his release.
The witness said Kebatu had in fact tried to go back into the prison several times, but was instead guided to Chelmsford station where he caught a train to London.
Mr Jenrick claimed the case was proof that “the only illegal migrants this government are stopping are those that actually want to leave the UK”.
“Dear oh dear,” he said. “Where to begin? This justice secretary could not deport the only small boat migrant who wanted – no – who tried to be deported.
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“Having been mistakenly released, Hadush Kebatu came back to prison asking to be deported not once, not twice, but five times, but he was turned away.”
He went on: “The only illegal migrants this government are stopping are those that actually want to leave the UK.
“His officials, briefing the press, called it the mother of all – yeah, they’re not wrong, are they?”
Mr Jenrick, who served as immigration minister under the previous Conservative government, branded his opposite number “calamity Lammy”.
“It’s a national embarrassment and today the justice secretary feigns anger at what happened.”
Continuing with his attack, Mr Jenrick asked Mr Lammy whether he would resign if Kebatu was not deported “by the end of the week” – to which he received no reply.
But asked later by an MP whether he was considering his position, Mr Lammy replied: “A ridiculous question, the answer is no.”
The new checks announced by Mr Lammy today involve five pages of instructions and require more senior prison staff to sign off a release, according to documents obtained by Sky News.
The instructions are effective from Monday.
Bitcoin’s latest pullback may already be bottoming out, with asset manager Grayscale arguing that the market is on track to break the traditional four-year halving cycle and potentially set new all-time highs in 2026.
Some indicators are already pointing to a local bottom, not a prolonged drawdown, including Bitcoin’s (BTC) elevated option skew rising above 4, which signals that investors have already hedged “extensively” for downside exposure.
Despite a 32% decline, Bitcoin is on track to disrupt the traditional four-year halving cycle, wrote Grayscale in a Monday research report. “Although the outlook is uncertain, we believe the four-year cycle thesis will prove to be incorrect, and that Bitcoin’s price will potentially make new highs next year,” the report said.
Related: Cathie Wood still bullish on $1.5M Bitcoin price target: Finance Redefined
Still, Bitcoin’s short-term recovery remains limited until some of the main flow indicators stage a reversal, including futures open interest, exchange-traded fund (ETF) inflows and selling from long-term Bitcoin holders.
US spot Bitcoin ETFs, one of the main drivers of Bitcoin’s momentum in 2025, added significant downside pressure in November, racking up $3.48 billion in net negative outflows in their second-worst month on record, according to Farside Investors.
More recently, though, the tide has started to turn. The funds have now logged four consecutive days of inflows, including a modest $8.5 million on Monday, suggesting ETF buyer appetite is slowly returning after the sell-off.
While market positioning suggests a “leverage reset rather than a sentiment break,” the key question is whether Bitcoin can “reclaim the low-$90,000s to avoid sliding toward mid-to-low-$80,000 support,” Iliya Kalchev, dispatch analyst at digital asset platform Nexo, told Cointelegraph.
Related: Strategy unveils new credit gauge to calm debt fears after Bitcoin crash
Fed policy and US crypto bill loom as 2026 catalysts
Crypto market watchers now await the largest “swing factor,” the US Federal Reserve’s interest rate decision on Dec. 10. The Fed’s decision and monetary policy guidance will serve as a significant catalyst for 2026, according to Grayscale.
Markets are pricing in an 87% chance of a 25 basis point interest rate cut, up from 63% a month ago, according to the CME Group’s FedWatch tool.
Later in 2026, Grayscale said continued progress toward the Digital Asset Market Structure bill may act as another catalyst for driving “institutional investment in the industry.” However, for more progress to be made, crypto needs to remain a “bipartisan issue,” and not turn into a partisan topic for the midterm US elections.
That effort effectively began with the passage of the CLARITY Act in the House of Representatives, which moved forward in July as part of the Republicans’ “crypto week” agenda. Senate leaders have said they plan to “build on” the House bill under the banner of the Responsible Financial Innovation Act, aiming to set a broader framework for digital asset markets.
The bill is currently under consideration in the Republican-led Senate Agriculture Committee and the Senate Banking Committee. Senate Banking Chair Tim Scott said in November that the committee planned to have the bill ready for signing into law by early 2026.
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Poland’s President Karol Nawrocki declined to sign a bill imposing strict regulations on the crypto asset market, drawing praise from the crypto community and sharp criticism from others in the government.
Nawrocki vetoed Poland’s Crypto-Asset Market Act, saying its provisions “genuinely threaten the freedoms of Poles, their property, and the stability of the state,” according to a statement by the president’s press office on Monday.
Introduced in June, the bill has drawn criticism from industry advocates such as Polish politician Tomasz Mentzen, who had anticipated the president’s refusal to sign it as it cleared parliamentary approval.
Although crypto advocates welcomed the veto as a win for the market, several government officials condemned the move, claiming the president had “chosen chaos” and must bear full responsibility for the outcome.
Why the president vetoed the bill
One of the main reasons cited for the veto was a provision allowing authorities to easily block websites operating in the crypto market.
“Domain blocking laws are opaque and can lead to abuse,” the president’s office said in an official news release.
The president’s office also cited the bill’s widely criticized length, saying its complexity reduces transparency and would lead to “overregulation,” especially when compared with simpler frameworks in the Czech Republic, Slovakia and Hungary.
“Overregulation is an easy way to drive companies to the Czech Republic, Lithuania or Malta, rather than create conditions for them to operate and pay taxes in Poland,” the president said.
Nawrocki also highlighted the excessive amount of supervisory fees, which may prevent startup activity and favor foreign corporations and banks.
“This is a reversal of logic, killing off a competitive market and a serious threat to innovation,” he said.
Critics jump in: “The president chose chaos”
Nawrocki’s veto has triggered a strong backlash from top Polish officials, including Finance Minister Andrzej Domański and Deputy Prime Minister and Minister of Foreign Affairs Radosław Sikorski.
Domański warned on X that “already now 20% of clients are losing their money as a result of abuses in this market,” accusing the president of having “chosen chaos” and saying he bears full responsibility for the fallout.
Related: Spain’s junior ruling party proposes 47% crypto tax in ‘attack against Bitcoin’
Sikorski echoed the concern, saying that the bill was supposed to regulate the crypto market. “When the bubble bursts and thousands of Poles lose their savings, at least they will know who to thank,” Sikorski argued on X.
Crypto advocates, including Polish economist Krzysztof Piech, quickly pushed back, arguing that the president cannot be held responsible for authorities failing to pursue scammers.
He also noted that the European Union’s Markets in Crypto-Assets Regulation (MiCA) is set to provide investor protections across all EU member states starting July 1, 2026.
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The US Federal Deposit Insurance Corporation will propose a framework for implementing US stablecoin laws later this month, according to its acting chair, Travis Hill.
“The FDIC has begun work to promulgate rules to implement the GENIUS Act; we expect to issue a proposed rule to establish our application framework later this month,” Hill said in prepared testimony to be delivered on Tuesday to the House Financial Services Committee.
He added the agency will also have a “proposed rule to implement the GENIUS Act’s prudential requirements for FDIC-supervised payment stablecoin issuers early next year.”
President Donald Trump signed the GENIUS Act in July, which created oversight and licensing regimes for multiple regulators, with the FDIC to police the stablecoin-issuing subsidiaries of the institutions it oversees.
The FDIC insures deposits in thousands of banks in the event that they fail, and under the GENIUS Act, it will also be tasked with making “capital requirements, liquidity standards, and reserve asset diversification standards” for stablecoin issuers, said Hill.
Federal agencies, such as the FDIC, publish their proposed rules for public feedback, and they then review and respond to the input, if necessary, before publishing a final version of the rules, a process that can take several months.
Related: Republicans urge action on market structure bill over debanking claims
The Treasury, which will also regulate some stablecoin issuers, including non-banks, began its implementation of the GENIUS Act in August and finished a second period of public comment on its implementation proposal last month.
FDIC is working on tokenized deposit guidelines
Hill said in his remarks that the FDIC has also considered recommendations published in July by the President’s Working Group on Digital Asset Markets.
“The report recommends clarifying or expanding permissible activities in which banks may engage, including the tokenization of assets and liabilities,” Hill said.
“We are also currently developing guidance to provide additional clarity with respect to the regulatory status of tokenized deposits,” he added.
Fed helping regulators with stablecoin rules
The Federal Reserve’s vice supervision chair, Michelle Bowman, will also testify on Tuesday that the central bank is “currently working with the other banking regulators to develop capital, liquidity, and diversification regulations for stablecoin issuers as required by the GENIUS Act.”
Bowman added, according to her prepared remarks, that “we also need to provide clarity in treatment on digital assets to ensure that the banking system is well placed to support digital asset activities.”
“This includes clarity on the permissibility of activities, but also a willingness to provide regulatory feedback on proposed new use cases,” she said.
The House Finance Committee’s hearing on Tuesday will also see remarks from the heads of the Office of the Comptroller of the Currency and the National Credit Union Administration, which will both have a role in implementing stablecoin rules.
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