Billionaire investor Elon Musk has sold his social media platform X to his AI startup xAI, sparking controversy as it coincides with a US judge rejecting his bid to dismiss a lawsuit tied to the social media platform.
The transfer of ownership of X to xAI on March 28 means that the class-action lawsuit against Musk — accusing him of defrauding former Twitter shareholders by delaying the disclosure of his initial investment in the social media platform — has become “a whole lot spicer,” Cinneamhain Ventures partner Adam Cochran said in a March 28 X post.
Acquisition may open up xAI to more ‘exposure’
On the same day that Musk said “xAI has acquired X in an all-stock transaction,” a US judge reportedly rejected Musk’s attempt to dismiss the lawsuit. Cochran said it has “opened up his AI entity to exposure here too, and it’s a much bigger pie.”
Musk said the deal values xAI at $80 billion and X at $33 billion, factoring in $12 billion in debt from the $45 billion valuation. He originally bought X, formerly Twitter, for around $44 billion in April 2022.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said.
“This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach,” he said, adding:
“This will allow us to build a platform that doesn’t just reflect the world but actively accelerates human progress.”
However, Cochran claimed that “Musk used his pumped up xAI stock to pay multiple times over value for X, but still take an $11B loss on the transaction.” He said that Musk is “screwing over xAI investors, and X investors” and was executed to sell user data to xAI.
xAI is best known for its AI chatbot “Grok” which is built into the X platform. When Musk released it in November 2023, he claimed it could outperform OpenAI’s first iteration of ChatGPT in several academic tests.
Musk explained at the time that the motivation behind building Grok is to create AI tools equipped to assist humanity by empowering research and innovation.
While Cochran said that Grok being valued at $80 billion is an “insanely dumb valuation,” crypto developer “Keef” disagrees. Keef said, “This is shady all around, but given the day, Grok is genuinely probably the top model for various tasks.”
Sex offenders could face chemical castration and thousands of offenders will be released after serving a third of their jail term, under plans proposed in a sentencing policy review set to be accepted by ministers.
The independent review, led by the former justice secretary David Gauke, was commissioned by the government amid an overcrowding crisis in prisons in England and Wales.
It has made a series of recommendations with the aim of reducing the prison population by 9,800 people by 2028.
The key proposal, which it is understood the government will implement, is a “progression model” – which would see offenders who behave well in jail only serve a third of their term in custody, before being released.
The measure will apply to people serving standard determinate sentences, which is the most common type of jail term, being served by the majority of offenders.
It will be based on sentence length, rather than offence type. That means sex offenders and domestic abusers serving sentences of under four years, could all be eligible for early release.
The policy will mean inmates serve only a third of their sentence in prison, a third on licence in the community, with the remaining portion under no probation supervision at all.
If the offender committed further offences in the “at risk” – or final – stages of their sentence, once out of prison, they would be sent back to jail to serve the remainder of the original sentence, plus time inside jail for the new offence.
Please use Chrome browser for a more accessible video player
2:25
Is government ‘prepared to be unpopular’ over prisons?
Chemical castration trial could be extended
The government will also further the use of medication to suppress the sexual drive of sex offenders, which is currently being piloted in southwest England.
The review recommended that chemical castration “may assist in management of suitable sex offenders both in prison and in the community”.
Ministers are to announce plans for a nationwide rollout, and will first expand the use of the medication to 20 prisons across England.
The justice secretary is also considering whether to make castration mandatory. It’s currently voluntary.
Mr Gauke, the chair of the independent sentencing review, told Sky News that “drugs that reduce sexual desire” will not be “appropriate for every sexual offender”.
“I’m not going to claim it’s the answer for everything,” the former justice secretary said. “This is about reducing the risk of re-offending in future.
“There are some sex offenders who want to reduce their desires and if we can explore this, I think that is something that’s worthwhile.”
However, Mr Gauke stressed that the government needs to focus on “reducing crime overall”.
Image: Prisons in England and Wales are facing an overcrowding crisis. File pic: PA
Domestic abuse commissioner criticises plans
Under his recommendations, violent offenders who are serving sentences of four years or more could be released on licence after spending half of their sentence behind bars. This could be extended if they do not comply with prison rules. These prisoners would then be supervised in the community until 80% of their sentence.
In response to the review, the police have warned: “Out of prison should not mean out of control.”
“If we are going to have fewer people in prison, we need to ensure that we collectively have the resources and powers to manage the risk offenders pose outside of prison,” said Chief Constable Sacha Hatchett at the National Police Chiefs Council.
The domestic abuse commissioner for England and Wales, Nicole Jacobs, said adopting the measures would amount to “watering down” the criminal justice system.
“By adopting these measures the government will be sending a clear message to domestic abusers that they can now offend with little consequence,” she said.
In a set of proposals considered to be the biggest overhaul of sentencing power laws since the 1990s, judges could be given more flexibility to punish lower level offenders with bans on football or driving.
The review has also recommended that short sentences should only be used in “exceptional circumstances”, suggesting they are “associated with higher proven reoffending” and “fall short in providing meaningful rehabilitation to offenders”.
The Howard League for Penal Reform has welcomed the proposals as a “good start”.
“This is a vital review that makes the case for change by focusing on the evidence on what will reduce reoffending and prevent more people becoming victims of crime,” said chief executive Andrea Coomber.
David Gauke’s review has called on the government to “invest” in a probation service that is “under significant strain”, as its proposals recommend a larger number of offenders should be punished and supervised in the community.
“Tagging can be a useful way to monitor offenders and identify escalating risks,” it said.
The government is set to invest a further £700m in the probation service and introduce a mass expansion of tagging technology, where tens of thousands of criminals will be monitored at any one time, creating a “prison outside of a prison”, with the help of US tech companies.
‘Overriding concerns’
The Victims Commissioner, Baroness Newlove, has expressed an “overriding concern” about the ability of an “already stretched probation service” to “withstand the additional pressure” of managing a larger number of people outside of prison.
The policy review also makes recommendations around offenders that are recalled to prison after breaching their licence conditions.
Currently, around 15% of those behind bars are there because they have been recalled. Mostly, it’s for breaching of licence conditions, rather than further offences.
The review recommends a “tighter threshold” for recall so that it is “only used to address consistent non-compliance”, with licence conditions – which can include missing a probation appointment.
Last week the government announced plans that will see offenders serving one to four-year sentences held for a fixed 28-day period if they are returned to jail.
The review suggests increasing that limit to 56 days, in order to “allow sufficient time for planning around appropriate conditions for safe re-release into community supervision”.
The government is expected to accept the review’s key measures, and implement them with a sentencing bill before parliament.
The plans will likely require legislation and only be before the courts by the spring of 2026.
Newly updated guidelines from Dubai’s crypto regulator include provisions on real-world asset (RWA) tokenization and clarify rules for issuers.
On May 19, Dubai’s Virtual Asset Regulatory Authority (VARA) released its updated Rulebook for virtual asset service providers (VASPs) operating in the region. The regulator gave market participants until June 19 to comply with the new rules.
The regulator previously told Cointelegraph that it had enhanced supervisory mechanisms and brought consistency across activity-based rules. One of the more prominent changes includes regulatory clarity on RWA tokens.
Irina Heaver, partner at the United Arab Emirates-based law firm NeosLegal, told Cointelegraph that the updated rules clarify RWA issuance and distribution.
“Issuing real-world asset tokens and listing them on secondary markets is no longer theoretical,” Heaver told Cointelegraph. “It’s now a regulatory reality in Dubai and the broader UAE.”
A “viable” path to realize RWA hype
Heaver compared RWAs to security token offerings (STOs), an earlier attempt from the crypto space to tokenize securities like stocks, bonds and real estate investment trusts. However, the UAE crypto lawyer said that STOs “died a peaceful death in 2018 to 2019.”
The lawyer told Cointelegraph STOs did not work out because of the lack of regulatory clarity, viable secondary market trading venues, institutional investor appetite and liquidity.
Still, the situation is different for RWAs. Heaver told Cointelegraph that RWAs are the next foundational layer for institutional adoption of blockchain and virtual assets. Heaver said that VARA’s new rules already cover them as Asset-Referenced Virtual Assets (ARVA) tokens. She said:
“VARA’s newly updated Virtual Asset Issuance Rulebook (May 2025) addresses these failures head-on. Regulated exchanges and broker-dealers in Dubai are now authorized to distribute and list ARVA tokens.”
The lawyer said this solves an issue in jurisdictions like Switzerland, where token issuance is possible, but listing and secondary trading remain unregulated.
Heaver said ARVA tokens are defined under Dubai law as representing direct or indirect ownership of real-world assets, granting entitlement to receive or share income and purporting to maintain a stable value by reference to real-world assets or income.
ARVA tokens are also backed or collateralised by such real-world assets or constitute a derivative, wrapped, duplicated, or fractionalised version of another ARVA.
The lawyer said issuers must meet specific requirements, including a Category 1 Virtual Asset Issuance license, a comprehensive white paper and a risk disclosure statement.
In addition, issuers must have a paid-up capital of 1.5 million UAE dirhams (about $408,000) or 2% of reserve assets held. The issuers are also subjected to monthly independent audit obligations and must adhere to ongoing supervisory oversight.
“VARA is providing regulatory clarity, and it’s giving the industry a viable, enforceable path to turn the hype of RWA tokenization into reality,” Heaver told Cointelegraph. “This matters because it marks a shift, from theory to execution, from fiction to framework.”
The government has been temporarily blocked from concluding the Chagos Islands deal by a late-night High Court injunction.
Ministers had been expected to complete a deal that would have seen the UK hand over sovereignty of the archipelago to Mauritius in the coming hours.
But in an emergency injunction granted early on Thursday, brought against the Foreign Office, Mr Justice Goose allowed “interim relief” to Bertrice Pompe, who had previously taken steps to bring legal action over the deal.
Ms Pompe is a Chagossian woman who sees the deal as a betrayal of their rights.
The order, granted at 2.25am, states the government may take “no conclusive or legally binding step to conclude its negotiations concerning the possible transfer of the British Indian Ocean Territory, also known as the Chagos Archipelago, to a foreign government or bind itself as to the particular terms of any such transfer”.
A hearing is expected to take place at the High Court at 10.30am on Thursday.
More from UK
Image: The location of the Chagos Islands
The government insisted this morning the Chagos Islands deal is the “right thing” for the UK.
A spokesperson said: “We do not comment on ongoing legal cases. This deal is the right thing to protect the British people and our national security.”
It was expected that Sir Keir Starmer would attend a virtual ceremony today to formally hand over sovereignty of the Chagos Islands to Mauritius, despite heavy criticism from the Conservatives and Reform UK.
The government has argued international legal rulings in favour of Mauritius mean this handover is necessary.
As part of the deal, the UK will lease back a military base on the archipelago for 99 years.
Robert Jenrick, the former justice secretary, told Sky News that the Chagos Islands deal is a “sell-out for British interests”.
He said: “You’re seeing British sovereign territory being given away to an ally of China and billions of pounds of British taxpayers money being spent for the privilege.
“So, if this group can force the government to think twice, then all power to them.”
With this injunction in place, Sir Keir can no longer legally complete the deal.
Ms Pompe, who filed the application for interim relief, believes the British government is acting with disregard for the human rights of the Chagossian people.
She has argued completion of the deal would amount to a breach of the Human Rights Act and the Equality Act.
Chagossians are the former residents of the Chagos Islands, who were removed from the islands, predominantly to Mauritius, between the mid-1960s and early-1970s.
Those born on the islands and their children hold British nationality, but subsequent generations born outside British territory have no entitlement to it.