The Tories’ attempts to force a grooming gang inquiry won’t result in a probe – here’s why
The Conservatives’ attempts to force MPs to vote for a statutory inquiry into child sex gangs would not lead to an inquiry, even if it’s supported in the Commons.
As part of the ongoing debate on the topic, Tory leader Kemi Badenoch has said her party plans to table an amendment on Wednesday to the Children’s Wellbeing Bill to require a statutory inquiry into grooming gangs.
Writing on X, Ms Badenoch said she hoped “MPs from all parties” would support the inquiry.
Passing the amendment, however, would not force the government to launch such an inquiry necessarily – and would instead kill the legislation.
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Here’s why…
What is the point of the amendment?
First off, it’s important to note that the primary purpose of moves like this is the politics, rather than the procedure.
By forcing a vote on an amendment – with Labour opposing it – the Conservatives will be able to point to Labour and say they voted against an inquiry.
Labour’s massive majority means the Tories have an almost zero chance of winning – and this kind of move is made by all oppositions.
Conservative strategists will also hope it foments unrest on the Labour benches if there are MPs unhappy with Downing Street’s or Sir Keir Starmer’s response to the issue.
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Why would supporting the amendment not cause an inquiry?
It is at this point we get into the weeds of parliamentary procedure.
When a bill is proposed in the Commons, it passes through several stages. First it is introduced to the House – and there is no debate at this point.
Then there is a “second reading”, where MPs debate the bill for the first time and vote on whether it should proceed.
It is after this point that MPs take the bill away into a committee and go through line by line and propose and consider amendments. Further votes follow, as well as stages in the Lords before it becomes law.
The Children’s Wellbeing Bill is set to have its second reading on Wednesday.
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‘Lies’ over grooming gangs
As was mentioned above – amendments do not normally take place until after this stage.
By proposing an amendment at the second reading, the Conservatives have to use what is known as a “reasoned amendment”.
If this passes, instead of changing the proposed bill for future votes, it kills it off and no further stages take place.
Furthermore, this would stop the government reintroducing the Children’s Wellbeing Bill again until after the next King’s Speech.
The purpose of Children’s Wellbeing Bill is to reform things like the children’s care system and protecting children in schools.
Will a vote take place?
Whether a vote takes place is up to the Speaker of the House of Commons.
It is impossible to know if he will choose the amendment – however, amendments in the name of the leader of the Opposition and supported by the shadow cabinet do tend to get selected so they can be debated.
However, a “reasoned amendment” has to be formulated in a specific way – notably, it needs to give a specific reason for the opposition to the bill.
Erksine May – the rulebook for the House of Commons – says the usual way is to use a form of words like “this House declines to give a second reading to a bill which …”, or “to the … Bill because …”.
This is instead of just voting against the bill in general, something achieved through the normal vote.
The last time such a bill was successful in killing legislation was in 1986.
Margaret Thatcher’s government was defeated on a second reading in 1986. Pic: PA
Margaret Thatcher’s attempts to reform Sunday trading legislation were halted at that time by a Labour Party led by Neil Kinnock.
However, proceedings were a bit confused. The Speaker initially refused to allow MPs to vote on Mr Kinnock’s amendment – and then changed his mind halfway through the debate.
With a significant number of Tory rebels, Mrs Thatcher was defeated following a late night vote.
What are the parties saying?
Since Ms Badenoch’s announcement on Monday, the Conservatives have doubled down on their position.
A spokesperson for the party said: “Labour are looking for any excuse to get out of holding a much-needed national inquiry into child rape grooming gangs.
“Labour’s attempts to hide behind parliamentary procedure and take the debate away from victims will not save them from their moral cowardice, and their failure to give victims the answers they deserve.
“Labour MPs now have the chance to do the right thing, and vote for justice.”
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Labour, meanwhile, says previous inquiries have carried out the work necessary to look into grooming gangs.
It says it plans to implement all the recommendations from the Jay review, and will announce more details in the Crime and Policing Bill at a point later this year.
The slow adoption of stablecoins in Canada has some local crypto industry observers concerned that the country is falling behind.
The Canadian Securities Administrators (CSA) classified stablecoins as “securities and/or derivatives” in December 2022 after the FTX debacle that shook markets and turned many lawmakers against the crypto industry.
Regulating stablecoins as a security has seen few local stablecoin issuers arise, but in the United States and the European Union, softening regulations have seen significant growth in the stablecoin market. This makes Canada, observers say, less competitive with other jurisdictions.
Of particular concern is the perceived gap in peer-to-peer (P2P) payments in Canada, which stablecoins are uniquely qualified to fill.
Local law constrains stablecoin growth and threatens dollar
In 2022, as the crypto market reeled from the collapse of FTX and the implosion of the Terra stablecoin system, regulators worldwide began to look more critically at the crypto space.
In Canada, the CSA updated regulations for crypto exchanges and brought stablecoins under its purview, classifying them as securities/derivatives. This hasn’t been a popular decision with Canada’s crypto industry.
Morva Rohani, founding managing director of the Canadian Web3 Council, told Cointelegraph that the CSA’s case-by-case basis for considering stablecoin issuers and the lack of a federal framework make for a “patchwork” regulatory regime.
“Canada’s reliance on securities law to regulate payment stablecoins introduces significant legal and operational uncertainty,” she said.
Tanim Rasul, chief operating officer of Canadian crypto exchange NDAX, said that the CSA “got it wrong,” stating that other regulatory frameworks, like the EU’s Markets in Crypto-Assets (MiCA) law, were more appropriate.
“I would just say, look at MiCA, look at the way they’re approaching stablecoins. It’s a payment instrument. It should be regulated as such,” he told a crowd at the Blockchain Futurist Conference in Toronto on May 13.
It’s not just the EU. Singapore and the UAE have also introduced regulatory frameworks for stablecoins, and US senators are optimistic they will pass a stablecoin law by May 26.
Related: What are the next steps for the US stablecoin bill?
Rohani said Canada is “out of step with leading global jurisdictions […] which have adopted tailored, prudential frameworks that recognize stablecoins as payment instruments.”
This lack of alignment with other, more pro-stablecoin jurisdictions could have negative effects for the Canadian dollar (CAD), some worry.
Som Seif, founder of Canadian investment firm Purpose Financial, said that the proliferation of other major stablecoins, mostly denominated in the US dollar, could threaten the use of the loonie (a nickname for the Canadian dollar) at home.
“If Canada does not create the regulatory framework and environment that encourages the development of CAD stablecoins, consumers and businesses will default to using USD-pegged alternatives, eroding the relevance of CAD in global markets,” he said.
Stablecoins provide cheaper P2P payments but reputation is also a roadblock
Members of the Canadian crypto industry have stated that stablecoins have a role to play in the country as well, given the purported lack of P2P payment networks available in the country.
Speaking to Cointelegraph on May 13, Coinbase Canada CEO Lucas Matheson said, “It’s really important that we have a stablecoin for Canadians.” He said that the only options currently open were wire transfers, which “cost $45 and take 45 minutes of paperwork.”
Rohani said that Interac e-Transfer, a Canadian funds transfer service, “remains the primary domestic P2P rail, operating through banks and credit unions.”
Related: Stablecoins seen as ideal fit for real-time collateral management
Canada does have apps like PayPal and Wise, which support international P2P transfers, but those often come with high commissions and slow settlement times compared to stablecoins.
Rohani said that while some crypto platforms allow for P2P transfers, they’re not widely used due to a lack of integration into mainstream financial services.
Demand for more and different digital payment methods is growing in Canada, according to the 2024 digital payments report from Payments Canada, the owner and operator of Canada’s payment clearing and settlement infrastructure.
But that demand may not translate directly into stablecoins. Crypto’s “journey towards financial integration among Canadians remains a distant prospect,” the report reads. Some 91% of Canadians have never used crypto as a payment.
Payments Canada attributes the lack of interest to the assets being perceived as the “least secure payment method among Canadians compared to alternatives such as cash, credit cards, cheques, wire transfers and PayPal.”
Even in the context of a central bank digital currency, which the crypto industry generally regards as a less favorable option to private, fiat-denominated stablecoins, interest just isn’t there. The survey found that 85% of respondents “did not envision themselves using a digital Canadian dollar and preferred their existing payment methods.”
Is PM Carney pro-crypto?
If more tailor-made regulations could integrate stablecoins with the mainstream payment options Canadians are comfortable with, it would still take a concerted effort from policymakers in Ottawa, where the Liberals have just won the federal elections.
The crypto industry had cause for doubt. Liberal Prime Minister Mark Carney has previously expressed skepticism about cryptocurrency. In a speech as Governor of the Bank of England, he said they had failed as money.
Still, he acknowledged stablecoins have a role to play in retail and wholesale payments. He said in 2021 that stablecoins should have access to central bank balance sheets — but only if strong protections were in place.
“There’s been two systemic crises in money funds in little more than a decade […] In baseball, it’s three strikes and you’re out. In cricket, it’s only the equivalent of one. For systemic payment systems, one is too many,” Carney stated.
Kohani said, “With Mark Carney at the helm of the Liberal Party, we anticipate a pragmatic but regulation-first approach to crypto and stablecoins.”
While his previous openness toward stablecoins suggests he’s open to the technology, he also “emphasizes the need for regulation, oversight and safeguards.”
Another Liberal term, per Kohani, will likely mean the CSA continues to lead enforcement but could result in broader policy work, including a framework on stablecoins, “particularly if positioned as a tool for payments modernization and maintaining the relevance of the Canadian dollar.”
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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.
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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.
Related: Stablecoins seen as ideal fit for real-time collateral management
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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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.
Related: Tether, Tron and TRM Labs jointly froze $126M USDT in 2024
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.“
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.
“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.“
“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.“
Related: Tether stablecoin issuer and Tron launch financial crime unit
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.“
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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