Labour MP Urges UK to Ban Crypto Political Donations Over Foreign Interference Fears

UK Labour MP Rushanara Ali has called for a complete ban on political donations via cryptocurrencies to prevent foreign interference in British elections. 

The Labour backbencher’s comments were made in relation to proposed changes to UK’s voting and election laws under the Government’s elections bill, formerly known as the Representation of the People Bill.

Ali argued that crypto makes it possible to circumvent donation laws — which prohibit donations from foreign nationals — such as by using multiple digital wallets with different addresses, breaking up large donations into smaller sums via ‘crowdfunding’, and the use of privacy coins. 

Unless action is taken now, the threat of foreign interference in our democracy will grow. The government must include an amendment to this bill to close this loophole.

Rushanara Ali, UK Labour Party MP

“The enemies of democracy are constantly looking at new ways to undermine our system,” Ali told The Guardian. “I urge ministers to go further to block the use of cryptocurrencies to funnel money into British politics.

Ali joins a chorus of backbenchers who’ve raised concerns about crypto donations. Seven senior Labour MPs who chair party committees penned an open letter in January 2026 to urge Prime Minister Keir Starmer to use the elections bill to make “explicit provision to disallow cryptocurrency donations to political parties and politicians.”

“When technology makes foreign interference cheaper, faster and harder to trace, the answer isn’t an open door. We have to bolt the door shut,” Labour MP Liam Byrne said. 

Related:UK Lawmakers Push for Ban on Crypto Donations in Politics

The fact Ali has also spoken out is significant because she originally helped to draft the elections bill when she was still Minister for Homelessness and Democracy in 2025. Ali resigned from her Ministerial role amid a scandal in August 2025, when it was revealed she ousted tenants from a rental property she owned so that she could re-list it at a higher rent.  

Crypto and Foreign Influence Risks to UK Democracy

Crypto donations are currently legal in the UK. The first party to accept and receive crypto donations in 2025 was Nigel Farage’s Reform party. 

The broader issue of foreign interference is in the spotlight after former member of European Parliament in Wales, Nathan Gill, who was convicted on eight counts of bribery in 2025 — for taking money from a pro-Russian politician in the Ukraine to make pro-Russian statements.

The UK Government subsequently launched an urgent review into foreign financial interference in UK politics, which is due to be finalised at the end of March. The review is focused on “the effectiveness of the UK’s political finance laws, as well as the safeguards in place to protect our democracy from illicit money from abroad, including cryptocurrencies.” 

The new elections bill currently progressing through parliament aims to improve how parties undertake checks on the donations they receive— so-called ‘Know your Donor’ checks. Donation recipients would be required to consider the risk of donations being illegitimate or likely to represent foreign interference, and to keep records of risk assessments. 

Related:UK Lawmakers Hear Skepticism on Stablecoins as Lords Launch Regulation Inquiry

Anti-corruption organisation Transparency International UK said the bill also strengthened rules on company donations — designed to stop foreign donations being hidden in shell companies registered in the UK — but didn’t go far enough to stop “big money” donations. 

“Legislation to close the dark money loopholes in British politics is long overdue, and this bill takes some welcome steps. But it does not go far enough — either to achieve its stated ambitions or to contend with the biggest threats to our democracy,” according to Duncan Hames, Director of Policy, Transparency International UK.

Hames said the super-rich would still be able to buy political influence, which was a larger driver of low public trust in British politics. 

The post Labour MP Urges UK to Ban Crypto Political Donations Over Foreign Interference Fears appeared first on Crypto News Australia.