The UK Parliament is preparing to consider a complete ban on cryptocurrency donations to political parties and election campaigns after its summer recess, with the proposed changes expected to form part of a new Representation of the People Bill.
The legislation would strengthen controls on political finance and expand the powers of the Electoral Commission. Although an independent review initially recommended a temporary suspension of cryptoasset donations, ministers are now considering a prohibition that would also cover money “made from the proceeds generated by crypto-assets.”
The issue is expected to be debated in the weeks ahead. The government announced plans for a ban under Keir Starmer’s Labour government after the publication of the Rycroft Review, which examined how to counter foreign financial influence and interference in UK politics.
The review called for a moratorium on electoral donations made using cryptoassets. It said the restriction should remain in place unless and until Parliament and the Electoral Commission were satisfied that the relevant regulatory framework was effective.
However, the government’s proposed approach would go further. The ban would take effect retrospectively once it was formally included in the Representation of the People Bill, although the final scope and wording of the restrictions have yet to be decided.
Several amendments are expected to be considered. One, put forward by Angela Rayner, would amend the Political Parties, Elections and Referendums Act 2000 “to prevent donations to registered political parties being made in cryptoassets”.
Critics have warned that this wording could leave significant gaps in the rules. Tim Picton, senior advocacy adviser at Spotlight on Corruption, said the proposal “does not go far enough to foresee and tackle potential gaping loopholes”.
In particular, the amendment would focus on direct cryptoasset donations, while potentially excluding cryptocurrency exchanges and memecoins from its provisions.
A broader amendment from Liam Byrne would address the use of crypto exchanges and payment platforms as intermediaries. Such services could be used to receive and process crypto payments before converting them into fiat currency and passing the money to political parties.
Byrne’s proposal aims to “prevent parties, regulated donees (including third-party campaigners) and candidates from accepting donations in cryptoassets or from the proceeds of cryptoassets, to reduce the risks of anonymous and impermissible donations”. It specifically identifies memecoins as a possible source of political funding.
The amendment is intended to prevent the emergence in the UK of a political cryptocurrency similar to the Trump token. Picton has highlighted concerns about the way that token was used “as a key fundraising tool by the President”.
He said such arrangements could allow foreign actors to buy influence within a government and secure privileged access to a president. Senior UK lawmakers are also calling for an immediate halt to cryptocurrency donations because of national security concerns linked to foreign influence.
The debate has intensified as cryptoasset millionaires have become increasingly visible in UK political life. Ben Delo, the co-founder and former BitMEX executive who was pardoned by President Trump after being convicted for establishing lax anti-money-laundering controls, was recently reported to have donated £4m to Reform UK.
That donation was recorded as having been made in cash rather than cryptocurrency. Reform UK has also been involved in other controversies concerning crypto donations.
The precise form and reach of the new restrictions will be determined during parliamentary discussions in the coming weeks.
