The chair of the UK Parliament’s Joint Committee on the National Security Strategy, Matt Western, has urged the government to temporarily halt cryptocurrency donations to political parties. In a letter dated February 23, 2026, Western wrote to Steve Reed, Secretary of State for Housing, Communities and Local Government. He warned that crypto contributions risk obscuring the true source of funds and could allow foreign interference in UK elections.
Western said the current framework lacks statutory guidance on how to verify and trace digital asset donations. He wants a temporary moratorium introduced in the forthcoming Representation of the People Bill. The pause would stay in place until the Electoral Commission issues binding rules on crypto donations. Without clear standards, Western argued, parties might accept funds they cannot reliably assess.
The call has sparked discussion across Westminster about balancing political fundraising freedoms with national security. Some lawmakers see the measure as necessary to protect election integrity. Others caution that an outright pause could suppress new forms of legitimate political support if rules are too strict or delayed.
Proposed Measures Aim to Increase Transparency
Alongside the temporary ban, Western offered several interim safeguards should crypto contributions continue in the short term. One key idea would require political parties to work only with registered virtual asset service providers regulated by the UK’s Financial Conduct Authority. This would help ensure stronger identity checks on donors.
Western also suggested that parties verify donor identities with a high degree of confidence before accepting any crypto funds. He emphasized the need to identify the ultimate source of the funds, not just the wallet address. To prevent obfuscation, he proposed that parties should convert crypto donations into pound sterling within 48 hours of receipt, strengthening financial transparency and audit trails.
The letter also recommended banning the use of mixers and tumblers in processing political donations, since these tools can conceal transaction histories. Beyond crypto-specific measures, Western wants a single national police lead for political finance and foreign interference work, harsher sentences for serious electoral finance offences, and stronger information-gathering powers for the Electoral Commission when scrutinizing suspicious donations.
Western’s proposals are now under review by government officials as they prepare the next phase of electoral law reform. The debate highlights increasing concern in the UK about how emerging technologies intersect with democratic processes.
Source: https://coinpaper.com/14940/uk-security-committee-chair-calls-for-temporary-ban-on-crypto-political-donations
