Crypto donations: UK urged to impose temporary ban

Published: 25 February 2026. The English Chronicle Desk. The English Chronicle Online.

Political donations in cryptocurrency should face an urgent temporary ban to prevent foreign interference. The focus on crypto in political finance has intensified following global security concerns and the increasing use of digital currencies in campaigns. Matt Western, chair of the national security committee, stressed that a moratorium is necessary until robust safeguards are in place to verify the source of all cryptocurrency contributions. The committee warned that without immediate intervention, foreign entities could exploit gaps in current political finance regulations. Western called for statutory guidance from the Electoral Commission to standardise how crypto donations are processed.

The committee highlighted that the new elections bill lacks any restrictions on donations made in cryptocurrency, prompting urgent calls for legislative action. Western addressed his concerns in a letter to Steve Reed, the cabinet minister responsible for electoral finance, urging swift measures to address potential risks. Reform UK became the first political party to openly accept contributions in digital currency earlier this year, using a dedicated crypto portal to handle donations with claimed enhanced verification checks. While the party says it has implemented safeguards, critics argue these measures are insufficient to prevent covert foreign influence in the political system.

Concerns have mounted that the absence of a central enforcement authority for political finance leaves the UK vulnerable to manipulation. Responsibility is currently split across the Electoral Commission, Metropolitan Police, counter-terror policing units, the National Crime Agency, MI5, and local police forces. Western argued that this fragmentation weakens the oversight of donations and may allow illicit funds to enter the political system undetected. The committee recommended establishing a single national police lead for political finance, with a focus on identifying and mitigating foreign interference risks. Such coordination would streamline investigations and strengthen public confidence in the integrity of elections.

The report further emphasised that interim guidance for cryptocurrency donations must require parties to work exclusively with Financial Conduct Authority-registered service providers. Parties should only accept donations where there is high confidence in the identity of the ultimate fund source. Any mechanism that obscures the origin of funds should be strictly prohibited. Western noted that the bill’s proposed “know your donor” checks do not adequately address the risk of foreign influence, as donors could use corporate entities or third parties to conceal illicit contributions.

Data from the Electoral Commission indicates that foreign money entering the political system, though relatively small in proportion, remains a tangible threat. The committee warned that as cryptocurrency becomes more widespread, the likelihood of foreign actors exploiting these channels will increase. Western stressed that without legislative action, political parties may inadvertently expose themselves to the risk of illicit finance. Campaign groups, such as Spotlight on Corruption, have reinforced these warnings, noting that crypto donations provide a range of tools for malign actors to hide the true source of funds. Tim Picton, senior advocacy adviser, described cryptocurrency contributions as a significant threat to democratic integrity.

Efforts to tackle the issue through the current elections bill have been described as insufficient by experts and parliamentary committees. While the government acknowledges the risks, it has yet to implement a ban on crypto contributions, citing the need for proper legislative backing. Ministerial sources previously told The Guardian that any government-imposed prohibition would likely require a statutory framework, rather than being left to voluntary guidance from the Electoral Commission. Western urged that a temporary moratorium be introduced immediately, until detailed regulatory guidance is established and enforced.

The committee also called for a review of sentencing for electoral offences, suggesting that harsher penalties would improve deterrence against illicit funding. Police officials have indicated that many covert investigative measures are only available for crimes carrying potential sentences of at least three years, leaving minor offences under current law less scrutinised. Western highlighted the importance of strengthening enforcement mechanisms alongside new restrictions on cryptocurrency donations to ensure that foreign actors cannot exploit loopholes.

Government departments have acknowledged the evolving threat posed by digital currencies in political finance. A spokesperson from the Ministry of Housing, Communities and Local Government said the Representation of the People bill aims to combat foreign interference by tightening rules around donations. Additionally, the ministry has commissioned an independent review led by former permanent secretary Philip Rycroft to explore further measures against illicit contributions, including cryptocurrency. This review is expected to provide comprehensive recommendations for safeguarding political finance while balancing transparency and party autonomy.

The debate over cryptocurrency in politics also touches on broader concerns about election integrity and public trust. Analysts argue that accepting donations in digital currency could open the door to anonymous foreign influence that is difficult to trace. Even with enhanced verification protocols, the inherent complexity of blockchain transactions and anonymised digital wallets presents enforcement challenges. Western’s committee stressed that without proper guidance, political parties may unintentionally expose themselves to accusations of receiving illicit funding, potentially undermining voter confidence.

Public scrutiny of political donations has intensified in recent years, especially with growing awareness of foreign interference in democratic processes. The UK’s security agencies have repeatedly warned that adversarial states may attempt to exploit vulnerabilities in political finance to advance strategic objectives. The committee’s recommendation for a single national police lead is intended to centralise oversight, improve coordination across multiple agencies, and ensure that any attempt to funnel funds through cryptocurrencies is promptly detected and addressed.

Experts emphasise that legislation alone cannot fully eliminate the risk of illicit crypto donations. Strong enforcement, rigorous verification protocols, and cross-agency collaboration are crucial for mitigating threats. Western underscored that the temporary moratorium on crypto donations would provide a necessary window to develop these safeguards. By mandating that all service providers are FCA-registered and that donor identities are verified with high confidence, parties can significantly reduce the likelihood of covert foreign interference.

In summary, the call for a temporary ban on cryptocurrency political donations reflects growing concern over the potential for foreign influence in UK elections. Matt Western and his committee argue that immediate legislative action, interim guidance, and enhanced enforcement are essential to protect the integrity of the political system. As Reform UK and potentially other parties continue to embrace digital currency contributions, the urgency for clear statutory guidance and a central enforcement authority becomes increasingly apparent. Policymakers face the challenge of balancing innovation in political fundraising with the imperative to safeguard democratic processes from foreign and illicit interference.

The committee’s recommendations aim to ensure that cryptocurrency does not become a tool for undermining electoral integrity. By establishing a moratorium, centralising oversight, and requiring robust verification, the UK can mitigate emerging risks while maintaining transparent political finance practices. These measures reflect an ongoing effort to protect elections from the evolving threats posed by modern technology, foreign actors, and the increasing use of digital currencies in politics. Immediate action, according to the committee, is necessary to prevent potential exploitation and safeguard democratic accountability ahead of future elections.

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