Adam Boulton: Next week’s by-elections will give a true pointer of which way the wind is blowing
July and December are always vicious months in the calendar at Westminster.
No matter when the monarch officiates at the official state opening of parliament, summer and winter are natural climaxes in the year when reckoning takes place.
In 2023, we have already had early casualties as parliament backed the reports of the standards and privileges committee. Boris Johnson has resigned as an MP and so have two colleagues, with more set to follow.
That is the overture to the drama which will unfold next week, when parliament is sitting for the last time before the long summer recess.
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On Wednesday, Rishi Sunak and Sir Keir Starmer are actually billed to turn up for the last PMQs until September, in the hope that they can send their MPs off in good spirits.
Then on Thursday there are three by-elections simultaneously in which the Conservatives are widely expected to lose all three hitherto comfortable seats. Such is the grim mood for Tories it will be an even bigger sensation if the Tories hang on to any of them.
To absorb the shock waves of these events both the prime minister and the leader of the opposition may well carry out long overdue reshuffles of the cabinet and shadow cabinet teams.
The three by-elections have all been triggered by Conservative MPs who resigned voluntarily, albeit with clouds hanging over their heads. Boris Johnson quit before a by-election could be triggered following his lengthy suspension from the house.
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By-election battlegrounds
At the 2019 General Election he had a 7,210 majority and 52.6% of the votes.
A close ally, Nigel Adams, stood down in Selby and South Ainsty after failing to receive the peerage which Mr Johnson had promised him. In 2019, he had 60.3% of the votes and a 20,137 majority.
David Warburton had the Tory whip withdrawn last year following cocaine and sex allegations. He finally quit complaining that he had been denied a fair hearing by parliament’s harassment investigators. He had 55.8% of the vote and a 19,219 majority in 2019.
By-elections are often exaggerated expressions of how the voters are feeling about the government.
There have been 13 by-elections this parliament
Early in this parliament, Boris Johnson’s popularity in the so-called red wall constituencies was proved by the Conservative’s unlikely victory in the formerly rock-solid Labour seat of Hartlepool, once held by the New Labour mastermind Peter Mandelson.
The tide has turned since then. There have been 13 by-elections this parliament, many held by the incumbent party, but the Conservatives have lost three seats to the Liberal Democrats and one to Labour.
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MPs spend 88,000 hours working elsewhere
Labour regained Wakefield after Imran Ahmed Khan, the incumbent Tory MP, was jailed for child sexual assault. The Liberal Democrats won in North Shropshire after Mr Johnson tried to protect his friend Owen Paterson from suspension for commercial lobbying.
They picked up Tiverton and Honiton after Tory MP Neil Parrish quit after being reported for watching online pornography in the Commons chamber. There was no scandal around the death of Dame Cheryl Gillan. She had campaigned vigorously but unsuccessfully on her constituents’ behalf to stop her government’s HS2 railway.
By-elections are useful political weathervanes. More often than not the biggest drops in support for the ruling party at by-elections come in the years leading up to a change of government.
On average, the Conservatives were down 14.1% before Harold Wilson beat Sir Alec Douglas Home, and 19.9% before the New Labour landslide victory in 1997. Harold Wilson was down 17.3% before Ted Heath’s surprise victory in 1970.
General sense is the Conservatives are heading for defeat
Jim Callaghan’s Labour was down 9.3% before the 1979. Gordon Brown was down 10.4% by 2010, although one of the biggest erosions was 19.9% in Labour support in the previous 2001 parliament. It just wasn’t big enough to destroy the massive lead built up under Tony Blair.
The general sense at Westminster is that the Conservatives are heading to defeat at the next election. That explains the pessimism about Tory chances on Thursday.
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‘Have you overpromised domestically?’
The well-known American pollster Frank Luntz told a private meeting of Conservative MPs that anyone with a majority of 15,000 or less should be seriously worried about their chances of holding their seat. On that basis, the Conservative candidates in North Yorkshire and Somerset should be hopeful.
Unfortunately for them that is not what polling in either Somerton or Selby points to. By-elections bring additional media attention and voters tend to punish parties if their MP has been forced out in disgrace or bothered them by called an election unnecessarily.
Mayor’s plan to extend ULEZ is not popular with many
An upset, which these days means the Conservatives hanging on, looks most likely in Uxbridge and Ruislip, the most marginal constituency of the three being contested. Boris Johnson brought celebrity glamour to suburban London, and some of his former voters still love him and resent him being forced out, as they see it.
The Labour Mayor of London’s plan to extent ULEZ, the ultra-low emission zone, to all of London including the constituency is not popular with many, since it would penalise those with polluting vehicles. The Labour candidate is now opposing his party’s ULEZ plan.
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A surprise Tory victory in Boris Johnson’s old stomping ground would be a mixed blessing for Rishi Sunak. It would be bound to encourage his supporters to claim that Mr Johnson and his polices are what the voters really like.
To prove it Nadine Dorries, another unhappy peerage refusenik, might at last execute her long delayed threat to resign her own seat in Bedfordshire Mid (2019 majority 24,664, 59.8%), plunging the government into further by-election turmoil.
There may well be another tricky by-election for the government soon in Tamworth (2019, Conservatives 66.3%, majority 19,634). A recall petition is due following the suspension of Chris Pincher from parliament for sexual misconduct.
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A similar recall petition is under way in Scotland in the Rutherglen and Hamilton West Constituency following the suspension ex-SNP MP Margaret Ferrier for breaking COVID lockdown rules. If the expected by-election takes place, Labour is hoping to oust the SNP.
Politicians often like to play down opinion polls saying they prefer real votes in real ballot boxes. That is exactly what parliamentary by-elections are. The three results will be scrutinised closely as they come in on Friday, including on Sky News.
They will give a true pointer of which way the wind is blowing and pile conflicting pressures on the party leaders for their reshuffles. To improve their electoral performance should they trim towards the centre or play to their party activists?
Looking at the prospects and the reasons for the elections in Yorkshire, London and Somerset it looks as if tidying up is taking place at the end of a fraying and exhausted government, but it is real voters who will decide next week.
In one of his first appearances as the recently sworn-in chair of the US Securities and Exchange Commission, Paul Atkins delivered remarks to the agency’s third roundtable discussion of crypto regulation.
In the “Know Your Custodian” roundtable event on April 25, Atkins said he expected “huge benefits” from blockchain technology through efficiency, risk mitigation, transparency, and cutting costs. He reiterated that among his goals at the SEC would be to facilitate “clear regulatory rules of the road” for digital assets, hinting that the agency under former chair Gary Gensler had contributed to market and regulatory uncertainty.
“I look forward to engaging with market participants and working with colleagues in President Trump’s administration and Congress to establish a rational fit-for-purpose framework for crypto assets,” said Atkins.
Some critics of US President Donald Trump see Atkins’ nomination to lead the SEC as a nod to the crypto industry, acting on campaign promises to remove Gensler — the former chair resigned the day Trump took office — and cut back on regulation. Democratic lawmakers on the Senate Banking Committee questioned Atkins on his ties to the industry, potentially presenting conflicts of interest in his role regulating crypto.
Related: Atkins SEC era sparks massive industry optimism, crypto execs speak out
The direction of the SEC under new leadership
“We’ve noticed that we don’t have to be as concerned […] about being accused of things that we’re not doing, like being broker-dealers for securities,” Exodus chief legal officer Veronica McGregor, who participated in the roundtable, told Cointelegraph on April 24.”It’s just a less scary regulatory environment in general. It is, however, still unclear what the ultimate regs are going to look like for crypto.”
The SEC crypto task force is scheduled to hold two more roundtables in May and June to discuss tokenization and decentralized finance, respectively. Commissioner Hester Peirce, who leads the task force, told Cointelegraph in March that she welcomed the opportunity to work with Atkins to “reorient the agency,” hinting at an SEC with regulations more favorable to the crypto industry.
In addition to the roundtables, the crypto task force has reported several meetings with digital asset firms to discuss various policies and considerations in developing a regulatory framework.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
Nasdaq has urged the US Securities and Exchange Commission (SEC) to hold digital assets to the same regulatory standards as securities if they constitute “stocks by any other name,” according to an April 25 comment letter.
The exchange said the US financial regulator needs to establish a clearer taxonomy for cryptocurrencies, including categorizing a portion of digital assets as “financial securities.” Those tokens, Nasdaq argued, should continue to be regulated “as they are regulated today regardless of tokenized form.”
“Whether it takes the form of a paper share, a digital share, or a token, an instrument’s underlying nature remains the same and it should be traded and regulated in the same ways,” the letter said.
It also proposed categorizing a portion of cryptocurrencies as “digital asset investment contracts,” to be subject to “light touch regulation” but still overseen by the SEC.
Related: Certain stablecoins aren’t securities, SEC says in new guidance
Regulatory U-turn
The SEC has dramatically pivoted its stance on cryptocurrency oversight since US President Donald Trump took office in January.
Under the leadership of former Chair Gary Gensler, the SEC took the position that practically all cryptocurrencies, with the exception of Bitcoin (BTC), represent investment contracts and therefore qualify as securities.
This stance led the agency to bring upwards of 100 lawsuits against crypto firms for alleged securities law violations.
However, under Trump nominee Paul Atkins, who was sworn in as chair on April 21 after a lengthy Senate confirmation, the SEC has claimed jurisdiction over a narrower segment of cryptocurrencies.
In February, the agency issued guidance stating that memecoins — if clearly identified as purely speculative assets with no intrinsic value — do not qualify as investment contracts pursuant to US law.
In April, the SEC said that stablecoins — digital tokens pegged to the US dollar — similarly do not qualify as securities if they are marketed solely as a means of making payments.
Integrating crypto into TradFi
In its April 21 letter, Nasdaq said existing financial infrastructure “can readily absorb digital assets by establishing the proper taxonomy and calibrating certain rules to reflect what is truly new and novel about digital assets.”
The Depository Trust & Clearing Corporation (DTCC) — a private US securities clearinghouse closely overseen by the SEC — has been laying the foundation for integrating blockchain technology into regulated financial markets.
In March, the DTCC committed to promoting Ethereum’s ERC-3643 standard for permissioned securities tokens.
Magazine: Ethereum is destroying the competition in the $16.1T TradFi tokenization race
Cryptocurrency firms and centralized exchanges are launching more traditional investment offerings, bridging the divide between traditional financial and digital assets.
With investors seeking more flexible product offerings under one platform, the “line is blurring” between traditional finance (TradFi) and the cryptocurrency space, as the two financial paradigms signal a “growing synergy,” according to Gracy Chen, CEO of Bitget, the world’s sixth-largest crypto exchange.
In the wider crypto space, Securitize partnered with Mantle protocol to launch an institutional fund that will generate yield on a basket of diverse cryptocurrencies, similar to how traditional index funds track a mix of stocks.
The developments come after crypto investor sentiment staged a significant recovery, moving from “fear” to “neutral” for the first time since January 2025.
Investor sentiment was bolstered after US President Donald Trump said that import tariffs on Chinese goods will “come down substantially,” adopting a softer tone in negotiations for the first time since the reciprocal tariff announcement.
Crypto firms moving into Wall Street territory
Cryptocurrency firms and exchanges are increasingly moving into Wall Street territory, launching more traditional investment offerings and showcasing the increasing connection between crypto and traditional finance (TradFi).
“There’s a growing synergy between traditional financial investments and the emerging crypto space,” according to Gracy Chen, the CEO of Bitget, the world’s sixth-largest crypto exchange.
“Crypto players are now checking out traditional finance as they see the opportunity to bridge it,” Chen told Cointelegraph.
“The lines are blurring. Investors want flexibility, and products that can straddle both worlds are naturally attractive,” Chen said. “Some players see TradFi as a safety net; others, like Bitget, see it as a launchpad for broader adoption.” She added:
“In a volatile market, integration is smarter than isolation.”
Securitize, Mantle launch institutional crypto fund
Tokenization platform Securitize partnered with decentralized finance (DeFi) protocol Mantle to launch an institutional fund designed to earn yield on a diverse basket of cryptocurrencies, the companies said.
Similar to how a traditional index fund tracks a mix of stocks, the Mantle Index Four (MI4) Fund aims to offer investors exposure to cryptocurrencies, including Bitcoin (BTC), Ether (ETH), and Solana (SOL), as well as stablecoins tracking the US dollar, Securitize said in an April 24 announcement.
The fund also integrates liquid staking tokens — including Mantle’s mETH, Bybit’s bbSOL, and Ethena’s USDe — in a bid to enhance returns with onchain yield, according to the announcement.
The launch comes as retail and institutions alike increase exposure to cryptocurrencies, particularly Bitcoin, as a hedge amid escalating macroeconomic uncertainty.
Mantra says CEO has begun the process of burning his 150 million OM tokens
Mantra founder and CEO John Patrick Mullin has started unstaking 150 million of his Mantra (OM) tokens in preparation for sending them to a burn address in an attempt to restore the token’s value by tightening supply.
Mantra announced on April 21 that the unstaking process had begun, and would be completed by April 29, at which point Mullin’s Mantra (OM) tokens will be sent to the burn address and permanently removed from circulating supply.
Mullin said it was a “first step in rebuilding trust with the community, but far from the last.”
Mantra said it was also in talks with “key ecosystem partners” about burning a further 150 million OM to bring the total burn amount to 300 million.
With 150 million fewer OM, Mantra’s total supply will decline to 1.67 billion, and its number of staked tokens will drop by over 26% to 421.8 million OM from 571.8 million OM.
Symbiotic raises $29 million for staking-based universal coordination layer
Cryptocurrency staking protocol Symbiotic closed a $29 million Series A funding round led by Web3-focused investment firms, including Pantera Capital and Coinbase Ventures, to support the launch of a new economic coordination layer for blockchain security.
The round included more than 100 angel investors, with participation by major industry players Aave, Polygon and StarkWare, the company said in an April 23 announcement shared with Cointelegraph.
The closing of the funding round also marks the launch of Symbiotic’s Universal Staking Framework, which aims to be an economic coordination layer that bolsters blockchain security via staking.
The new staking layer enables the use of any combination of cryptocurrencies to secure networks, including monolithic and modular layer-1 and layer-2 blockchains, the announcement said.
“We’ve created a modular framework that lets protocols evolve security models over time while efficiently coordinating risk,” Misha Putiatin, co-founder of Symbiotic, told Cointelegraph. “This empowers protocols at every stage of their lifecycle to evolve their security models seamlessly without rebuilding infrastructure.”
SEC delays decision on Polkadot ETF
The US Securities and Exchange Commission (SEC) delayed a decision on whether to approve a proposed exchange-traded fund (ETF) holding Polkadot’s native token, regulatory filings show.
According to an April 24 filing, the regulator has extended its deadline for a final ruling until June 11, nearly four months after the Nasdaq sought permission to list Grayscale Polkadot Trust on Feb. 24.
Grayscale’s ETF filing adds to a roster of about 70 proposed ETFs awaiting SEC approval, including funds holding altcoins, memecoins and crypto-related financial derivatives, according to Bloomberg Intelligence.
Asset managers are pitching ETFs for “[e]verything from XRP, Litecoin and Solana to Penguins, Doge and 2x Melania and everything in between,” Bloomberg analyst Eric Balchunas said in an April 21 post on the X platform. Asset manager 21Shares is also awaiting permission to list its own Polkadot ETF.
DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the green.
The Official Trump (TRUMP) token rose over 73% as the week’s biggest gainer, after the president announced an exclusive in-person dinner for the top tokenholders. The Sui (SUI) token rose over 69% as the week’s second-best performing token.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
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