UK lawmakers push to ban crypto political donations over foreign interference fears

What to know

• Senior Labour MPs are urging UK Prime Minister Keir Starmer to ban cryptocurrency donations to political parties, citing concerns about foreign interference in elections.
• They argue that cryptocurrency's opacity and traceability issues make it a threat to democratic integrity, citing a US intelligence report on Russian election interference.
• The UK currently allows crypto contributions, but only a few parties have accepted them, sparking calls for a ban ahead of a broader review into foreign financial influence.

Senior Labour members of parliament (MPs) are calling on U.K. Prime Minister Keir Starmer to ban cryptocurrency donations to political parties, warning these could be used by hostile foreign actors to influence elections.

In an open letter, seven committee chairs, including Liam Byrne, Emily Thornberry and Matt Western, urged Starmer to add a clear ban to the government’s forthcoming elections bill.

They argue that crypto poses a growing threat due to its traceability issues and potential use by foreign states looking to interfere in British politics.

“Crypto is opaque, hard to trace, vulnerable to foreign interference & a growing risk to democratic integrity,” MP Liam Byrne wrote. “We should make clear NOW this loophole will be closed.”

The letter cites a 2022 U.S. Department of State intelligence report alleging Russia spent over $300 million since 20244 on “influencing and interfering in elections across the world, including direct payments to political parties, candidates, and officials, using cryptocurrency as one of its tools.”

While the U.K. currently allows crypto contributions as long as they meet the same eligibility rules as other donations, only three registered parties have accepted them.

The Electoral Commission’s database shows that in the third quarter of last year, political parties received over 24 million pounds (around $32 million) in donations. It doesn’t specify whether any were in cryptocurrency form.

Reform U.K. is the most prominent party accepting crypto, and has confirmed it has received at least one such donation. While crypto investor Christopher Harborne famously made a 9 million pound ($12.1 million) donation to the party late last year, it wasn’t made using cryptocurrency.

The push for a ban comes ahead of a broader review into foreign financial influence led by Philip Rycroft, a former senior civil servant. That report is not due until March, and it remains unclear whether the government will act before then.

A government spokesperson said defending U.K. democracy from foreign interference remains a top priority, according to the Observer.

This is notably not the first time MP Liam Byrne called for a ban on cryptocurrency donations to political parties. In July of last year, he wrote an opinion piece for The Guardian titled “Crypto donations could entirely corrupt British politics. Labour must act quickly,” with a similar message.