UK Lawmakers Call for Crypto Ban in Politics to Stop Hidden Donations

TLDR

• Seven UK MPs call to ban crypto donations, citing transparency risks.
• Reform UK leads the way, accepting crypto with £9M record backing.
• MPs warn crypto donations may allow foreign interference in elections.
• Verifying crypto sources remains tough, complicating election rules.
• UK eyes strict digital asset regulation to secure political finance.

Seven senior UK lawmakers have urged Prime Minister Keir Starmer to ban cryptocurrency in political donations to prevent hidden funding. The MPs wrote a formal letter calling for the ban to be included in the upcoming elections bill. They argue that crypto donations undermine transparency and make it difficult to trace funding sources.

The lawmakers highlighted risks including foreign interference and micro donations below reporting thresholds. They insisted that political finance must be fully traceable and enforceable. The push comes as local elections approach in May, adding urgency to the debate.

Government officials have indicated that including a crypto ban in the elections bill may be complex. They also said verifying the source of cryptocurrency donations presents challenges for regulators. Despite this, the lawmakers continue to press for a full prohibition.

Reform UK Leads Crypto Donations in Politics

Reform UK announced plans to accept cryptocurrency donations, becoming the first UK party to do so. The party emphasized that it does not allow anonymous crypto donations. Nigel Farage promoted a broader strategy involving a Bitcoin reserve and tax incentives.

The party received a record £9 million donation in cash from Christopher Harborne, a major crypto investor. Although the donation was not made directly in crypto, his wealth comes largely from digital assets. This triggered calls for closer oversight and investigation into potential conflicts of interest.

The development marks a shift in British politics, as crypto donations could influence campaign financing. Lawmakers stressed that without proper rules, digital assets might expose elections to manipulation. The case of Reform UK highlights the growing presence of cryptocurrency in UK political funding.

Regulatory Context and International Comparison

The UK has advanced legislation recognizing digital assets as property and plans to regulate them like traditional financial products. The Financial Conduct Authority is preparing rules for stablecoins, trading platforms, lending and staking by 2026. The broader framework aims to secure transparency and reduce illicit activity in crypto markets.

Internationally, the approach differs, as US crypto-backed political action committees spent over $190 million during the 2024 elections. Some US states ban crypto donations, but no federal prohibition exists. UK lawmakers argue that a proactive ban can prevent scandals and maintain electoral integrity.

Labour MPs and advocacy groups stress that crypto donations conflict with government warnings about foreign interference and hostile actors. They argue that rules must adapt to real-world risks posed by modern technology. Lawmakers continue to call for immediate legislation to stop crypto donations in UK politics.

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