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We may have been in Easter recess the past couple of weeks, but on both sides of the party divide, there were those who did not get a rest from politics.

MP William Wragg undoubtedly had a dysfunctional week as the man at the centre of the Westminster honeytrap scandal.

He resigned the Conservative party whip as some colleagues looked on with a mixture of bemusement and anger at Number 10’s handling of the whole sorry affair.

Meanwhile, on the Labour side, deputy leader Angela Rayner can’t seem to shake off or shut down the persistent questions about whether she paid the right amount of tax when she sold her council house nearly a decade ago.

She insists she has done nothing wrong while there are Conservatives looking to weaponise the issue in this election year – with at least one local Tory councillor and other protesters this week hounding her on a visit to Teesside, with banners dubbing her a “tax dodger”‘ in the hope it will stick.

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This week in Electoral Dysfunction, Jess, Ruth and I chew over both the substance and the politics of these difficult situations and ask whether Number 10 and Labour are making tricky issues better or worse.

When it comes to Mr Wragg, who admitted sharing MPs’ and journalists’ phone numbers with someone he met on Grindr who had “compromising things” on him, there is widespread incredulity that a sitting MP would do such a thing, overlaid with some anger over Number 10’s handling of it – with some arguing that Rishi Sunak failed to move quickly enough to take control of the story, suspend Mr Wragg and look decisive.

Instead, ministers were dispatched to defend the MP as ”courageous”, while it was Mr Wragg himself who decided to give up the Tory whip his week. He is now sitting as an independent MP.

“Madness [to send pictures and give out personal details] and yet our leadership decided to defend him,” one former cabinet minister texted this week. “If it wasn’t so stupid. It would be genuinely funny. The script of the Thick Of It. A few of us messaged centre at weekend to say WTF. His resignation was inevitable.”

Ruth agrees, and says – while she has sympathy for Mr Wragg being in this “horrible situation” – that he is “somebody in an important job who has responsibilities” to the place he works and people with whom he works.

“The idea you throw all of that out of the window for a quick shag or to exchange a pic is so wilfully irresponsible that actually I don’t think [much of] the level of understanding, or acceptance or excuse that the government made on his behalf.

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Sexting MP ‘right to quit’

“I think it’s bad judgement and I think this is another one where you look at the judgement of the prime minister and go, you know this, this doesn’t fly.”

But aside from questions about the political handling from the centre – and there are issues around safeguarding a vulnerable MP, which I talk about in the pod – there are also wider questions, again, around MPs’ security in a world where contacts count and phone numbers are currency.

“People give numbers out all the time. Having people’s phone numbers is a massive currency in Westminster,” explains Jess, who points out that MPs are using personal phones in parliament.

“The trouble is that I think people think we have parliamentary phones but it’s just my personal phone, so they don’t own it. I’m way more careful about my parliamentary computer and the iPad they gave me.

“So I imagine what will come out of this is probably that we all have to have parliamentary-issued phones that are locked down by the security services. I imagine that’s where it’s going.”

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Starmer: Rayner tax story is ‘smear’

With a sex scandal engulfing the Conservatives once more, on the other side of the political divide, Ms Rayner is struggling to put to bed questions over whether she paid the right amount of tax when she sold her council house nearly a decade ago, before she became an MP.

Ms Rayner has made it clear she took tax advice at the time and has done nothing wrong, while Labour leader Sir Keir Starmer has come out to defend her and accused the Tories of trying to smear her over a story with no substance.

Neither Ruth, Jess nor I think the story is getting much cut through, largely because of the complexity of it all, but that isn’t stopping the Conservatives pursuing Ms Rayner with real ferocity.

Ruth thinks the Tories are going in hard for a number of reasons.

First, she thinks Labour “hasn’t had this level of scrutiny for a long time”, so this is an opportunity for the party machine to “try to flex its muscles”. Second, Ms Rayner has been used as “an attack dog” for the party on these issues so “what’s good for the goose is good for the gander”.

Read more:
Angela Rayner’s tax affairs – a smear or a real trust problem for Labour?

Michelle Donelan: Minister’s legal fees take total cost of libel case to £34,000

She also argues that “there is a purpose to man-mark her off the pitch”, but it won’t change the public’s view of Ms Rayner: “She’ll be a Marmite politician for the whole of her career because of the strength of her character. The people who love her will love her and the people who can’t stand her will turn the TV off when she comes on.”

Jess concedes the issue is hurting Ms Rayner but thinks she will ride it out and believes there’s a risk that “if it starts to look like the Conservatives are picking on her, it has a counter effect”.

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But, in a similar way to the Beergate story that hounded Sir Keir and Ms Rayner during 2021 – they were accused, and cleared, of breaking lockdown rules in Durham – the Conservatives show little sign of letting go of Ms Rayner or her tax affairs until they have wrung every single drop out of it.

And if, in an election year, they can try to make “tax dodger” land – or at least disrupt her campaigning – Conservative campaign headquarters will chalk it up as a win.

So while the hope from Ms Rayner’s and Sir Keir’s respective offices is that the story will burn itself out, it may be that Ms Rayner, in the end, has to do more to put it properly to bed: on that, all three of us agree.

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US court freezes $57M USDC allegedly linked to LIBRA scandal

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US court freezes M USDC allegedly linked to LIBRA scandal

US court freezes M USDC allegedly linked to LIBRA scandal

A US federal court has frozen around $57.65 million worth of the stablecoin USDC in a class action case over the controversial Libra memecoin.

Onchain data shared with Cointelegraph by the class group’s lawyer, Max Burwick, shows nearly $57 million worth of USDC (USDC) was frozen on May 28 after a Manhattan court agreed to a temporary freeze.

“Yesterday, a federal court in SDNY [Southern District of New York] entered a Temporary Restraining Order at our request, Burwick Law, supported by Tim Treanor, freezing approximately 57.65 million USDC held at Circle,“ Burwick told Cointelegraph.

He added that the court is scheduled to hold a hearing on June 9 to determine whether the assets will remain frozen as the class-action lawsuit progresses.

Burwick is representing Omar Hurlock and other plaintiffs in a class-action suit against crypto venture firm Kelsier Ventures and its three sibling co-founders, Gideon, Thomas and Hayden Davis, on March 17, alleging they created the Libra (LIBRA) cryptocurrency and misled investors to siphon over $100 million from one-sided liquidity pools.

The suit also named blockchain infrastructure companies, KIP Protocol and its CEO, Julian Peh, along with Meteora and its co-founder, Benjamin Chow, as defendants.

Chow’s lawyer, Kelsier Ventures and KIP Protocol were contacted for comment. 

LIBRA reached a $4 billion market cap following an X post from Argentine President Javier Milei on Feb. 14 before crashing 94% hours later.

The saga caused a political scandal for Milei, prompting members of Argentina’s opposition party to call for his impeachment, though little traction was gained beyond those statements.

Data from polling platform Zuban Córdoba in March suggested that the Libra scandal negatively impacted Milei’s image and the national management approval rating.

Two Solana wallets with total USDC balances worth $57.65 million were frozen on May 28 at 3:15 am and 3:18 am UTC.

Data from Solana’s blockchain explorer, Solscan, shows that the address “3Fwr…ZQpK” had $44.59 million worth of the stablecoin frozen, while a little over $13 million was frozen from the wallet address “3nHw…xNgH.”

Both wallets were frozen by the Multisig Freeze Authority, Solscan data shows.

Milei closes Libra investigation in Argentina

On May 19, Milei signed a decree to shut down a task force established to investigate the Libra scandal.

Related: Solana may be a memecoin ‘one-trick pony’ — Standard Chartered

No action was taken against Milei or any other Argentine official allegedly tied to the scandal.

However, some critics say a legitimate investigation wasn’t properly conducted in the first place.

“It was always a fake, they never dared to investigate anything at all, and they’re covering each other up because they’re completely up to their necks in it,” Itai Hagman, an economist and member of the Chamber of Deputies of Argentina, said in a May 20 X post.

Magazine: Memecoins are ded — But Solana ‘100x better’ despite revenue plunge

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Labor Department rescinds Biden-era guidance for crypto in 401(k) plans

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Labor Department rescinds Biden-era guidance for crypto in 401(k) plans

Labor Department rescinds Biden-era guidance for crypto in 401(k) plans

The US Labor Department has officially rescinded guidance issued during the Biden administration that limited the inclusion of cryptocurrency in 401(k) retirement plans.

On May 28, the Labor Department revoked a 2022 guidance that had urged fiduciaries to be “extremely cautious” when considering cryptocurrency for 401(k) retirement plans. The move could give asset managers more flexibility to include digital assets in retirement investment options.

The government agency removed the guidance asserting that it represented a departure from the department’s “historically neutral, principled-based approach to fiduciary investment decisions.”

“We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats,” said US Secretary of Labor Lori Chavez-DeRemer.

The Labor Department under Biden criticized the practice of marketing cryptocurrencies to 401(k) participants. At the time, the agency claimed cryptocurrencies posed “significant risks and challenges” to participants’ retirement accounts due to their “speculative and volatile” nature and “valuation concerns,” among other reasons.

The American Banking Association (ABA) criticized the 2022 compliance release, claiming that it did not make the guidance available for public comment and review prior to issuance.

Related: Fidelity introduces retirement accounts with minimal-fee crypto investing

Trump administration shifts crypto landscape

President Trump has pledged to make the United States “the world capital of crypto” during his 2024 campaign.

Under his administration, the Securities and Exchange Commission has scaled back several enforcement actions and investigations involving Web3 companies such as Uniswap, Coinbase, and Kraken, while also engaging in policy discussions on topics like real-world asset tokenization and the regulatory status of certain tokens.

At the same time, some lawmakers have expressed concerns about Trump’s involvement in the crypto space, including calls for greater scrutiny of his associated ventures.

Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions

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Pakistan announces Bitcoin strategic reserve

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Pakistan announces Bitcoin strategic reserve

Pakistan announces Bitcoin strategic reserve

Bilal Bin Saqib, head of Pakistan’s crypto council, announced on May 28 that the country is moving to establish a strategic Bitcoin reserve.

Speaking at the Bitcoin 2025 conference in Las Vegas, Nevada, Saqib said the government of Pakistan followed the United States’ lead in establishing a Bitcoin strategic reserve and is embracing pro-crypto regulatory policies. The government official told the audience:

“Today is a very historic day. Today, I announce the Pakistani government is setting up its own government-led Bitcoin Strategic Reserve, and we want to thank the United States of America again because we were inspired by them.”

The announcement represents a significant departure from the government of Pakistan’s previous stance on cryptocurrencies, holding that crypto would never be legal in the country.

Pakistan’s shift reflects the broader trend of nation-states adopting pro-crypto policies following the regulatory shift in Washington, DC under the President Donald Trump administration.

Government, Bitcoin Reserve, Bitcoin2025
Bilal Bin Saqib at the Bitcoin 2025 conference announcing a Bitcoin strategic reserve. Source: Cointelegraph

Related: Pakistan appoints special assistant to PM on blockchain and crypto

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