A UK parliamentary committee called on the government to introduce “an immediate moratorium on crypto donations” until Parliament approves the Electoral Commission’s statutory guidance.
In a report, the Joint Committee on National Security Strategy said crypto poses an avoidable risk to political finance and public trust. The committee said the rules should be ready before the next general election.
The report noted that the same properties that make crypto useful for fast payments also make it harder to monitor. It points to mixers, tumblers, privacy coins and chain hopping as tools that can obscure the source of funds and warns that artificial intelligence tools can help split a large payment into many sub-500-pound ($668) donations, keeping each below the normal reporting threshold.
Crypto donations remain legal in the country, although crypto assets are treated as property rather than legal tender, the report adds. Reform UK, the party led by Nigel Farage that leads in national opinion polls, is the first European political party to say it will accept crypto donations.
The total value of crypto donations Reform UK has received so far is unclear. Crypto investor Christopher Harbone has donated around $12 million in cash to the party.
Natasha Powell, crypto exchange Kraken’s chief compliance officer, told lawmakers that regulated exchanges can handle much of the danger. Still, the committee was unconvinced, saying the current framework lacks the tools and staff needed to verify donors, track funds and avoid abuse. As such, it wants the moratorium written into the people’s representation.
The report adds that a ban on direct crypto gifts would not close every loophole. A donor can still cash out cryptocurrencies into pounds before sending money through the banking system.
The committee also wants the Election Commission to be given powers to compel information from banks, tax authorities and crypto platforms when it suspects illegal activity, the report adds.
Senior Labor MPs earlier this year called on Prime Minister Keir Starmer to ban cryptocurrency donations to political parties over concerns these could be used by hostile foreign entities to influence elections.
