UK moves to ban crypto political donations over anonymity and foreign influence concerns
UK ministers are drawing up plans to prohibit political donations made using cryptocurrency, citing growing concerns about anonymity and the potential for foreign interference. However, Whitehall officials say the ban will not be ready in time for the government’s upcoming elections bill early next year.
The government increasingly views crypto-based donations as a threat to election integrity because the true source of funds can be extremely difficult to verify. While ministers want to outlaw them, officials say the technical and legal complexities of cryptocurrency make it unrealistic to finalize a ban before the elections bill is published. That bill will focus primarily on lowering the voting age to 16 and tightening rules around political financing.
A ban would be a setback for Nigel Farage’s Reform UK, which this year became the first British political party to accept crypto donations. The party has already received its first reportable contributions in digital assets and launched its own crypto donation portal, claiming to use “enhanced” checks on contributors.
Government insiders say ministers are convinced that crypto donations pose a risk because they can be hard to trace and may be used by foreign governments or criminal networks. Pat McFadden, then serving in the Cabinet Office, raised the issue in July:
“It’s very important that we know who is providing the donation… what are the bona fides of that donation.”
Although the Electoral Commission offers guidance on handling crypto contributions, any full ban would need to come from government legislation. Earlier this year, the Commission suggested the risks were manageable, likening crypto to other non-cash assets such as artwork or in-kind gifts.
But concerns have grown. Electoral Commission chief executive Vijay Rangarajan—who initially resisted the idea of a ban—told MPs in August that political parties already handle “far more weird things than crypto,” such as donated yachts or foreign trips. Yet by September, he had become more skeptical.
Rangarajan explained that while blockchain transactions can be traced between wallets, identifying who actually controls an overseas wallet is often nearly impossible:
“You will know that a wallet had that asset and that it was transferred on this date, but we do not know who was making these [transactions]… The resources needed to track back through many of these crypto transactions are really significant.”
Campaign groups have also warned that allowing crypto donations opens the door to foreign influence. Susan Hawley, executive director of Spotlight on Corruption, welcomed the government’s direction but urged further action:
“Crypto donations present real risks to our democracy… adversaries like Russia use crypto to undermine democracies globally.”
Hawley said any ban must be paired with new criminal offences to block foreign money from entering UK politics and properly fund police investigations.
