- Senior Labour MPs want crypto donations banned from UK politics ahead of the next Election Bill.
- Lawmakers argue that crypto enables anonymous funding, micro-donation abuse, and foreign interference.
- The government agrees on the risk but says enforcement may not be ready in time.
Seven senior Labour MPs who chair key parliamentary committees have urged the UK government to ban political donations made in cryptocurrency. The MPs include former minister Liam Byrne, Emily Thornberry, Matt Western, and more.
The demand targets the upcoming Election Bill and comes amid growing concern that crypto messes up the basic safeguards in political finance. The group argues that political funding must be transparent, traceable, and enforceable. Crypto fails all three tests.
MPs have warned that digital assets can hide the real source of money, allow mass micro-donations below disclosure limits, and open the door to foreign interference.
The Electoral Commission has already stated that current technology makes these risks difficult to police in real time.
Foreign Influence Risk
Lawmakers say the core risk is not domestic donors but hostile foreign actors. Crypto transactions can move across borders instantly and outside UK-regulated systems.
Committee evidence has also raised concerns that AI tools could further blur donor identities. Labour MPs want the Election Bill to explicitly disallow crypto donations to parties and individual politicians.
They argue that waiting for stronger oversight frameworks would leave elections exposed during a critical window. Some MPs warned that without a ban, amendments would be tabled and could gain wide support in Parliament.
Government Hesitation and Political Fallout
Ministers have acknowledged the risk but remain unsure whether a workable ban can be implemented in time for the bill, which is due shortly. Officials point to the technical complexity of enforcement as the main obstacle.
A ban would hit Reform UK hardest. The party became the first major UK political group to accept crypto donations this year and has confirmed receiving at least one registrable contribution through its digital asset portal.
Campaign groups argue that partial rules are not enough. They want a clear criminal offence tied to foreign-funded crypto donations and stronger resourcing for investigations.
Regulation Tightens Elsewhere
Meanwhile, the Financial Conduct Authority (FCA) will require all crypto service providers to seek full authorization under a new framework taking effect in October 2027.
The regulator begins accepting applications in September under rules that expand existing financial laws to cover exchanges, brokers, lending platforms, and decentralized finance.
Lawmakers’ position is simple: until crypto can be fully supervised, it should stay out of UK elections.
Related: What are the New Crypto Rules in Europe and the UK?
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Source: https://coinedition.com/uk-mps-push-to-ban-crypto-donations-over-foreign-interference-risk/
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