A UK parliamentary committee has called for an "immediate moratorium on crypto donations" to political parties, warning that the current rules leave British elections dangerously exposed. The Joint Committee on the National Security Strategy published the demand in a formal report, framing crypto's role in political financing as an "avoidable risk" to both public trust and the integrity of the democratic process.
This isn't a fringe concern from a handful of backbenchers. The committee wants the moratorium written directly into the Representation of the People Bill, giving it legal teeth before the next general election.
Why Crypto Makes Political Donations So Hard to Track
Here's the thing: crypto donations are still perfectly legal in the UK right now. Cryptoassets are treated as property rather than legal tender, which means they sit in a regulatory grey zone when it comes to political finance.
The committee's report zeroes in on the specific features of crypto that make it tricky to police. Fast transaction speeds, mixers, tumblers, privacy coins, and chain-hopping can all obscure where money actually comes from. The report also flags a more alarming possibility: AI tools could be used to split large donations into many smaller payments, each kept below the £500 ($668) reporting threshold, effectively hiding significant sums from regulators.
Even a direct ban on crypto gifts wouldn't fully close the gap. As the report itself acknowledges, a donor could simply convert cryptocurrency into sterling and funnel it through the banking system instead.
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The committee is urging the Electoral Commission to gain new powers to compel information from banks, HMRC, and crypto platforms whenever it suspects impermissible donation activity.
Reform UK and the Donation That Sparked the Debate
Reform UK, led by Nigel Farage and currently leading in national polls, became the first European political party to announce it would accept crypto donations. The total value of crypto it has received remains unclear. What is known is that crypto investor Christopher Harbone has donated around $12 million in cash to the party, separate from any crypto contributions.
That backdrop has sharpened the urgency in Westminster. Senior Labour MPs had already pushed Prime Minister Keir Starmer earlier this year to ban crypto political donations outright, citing fears about hostile foreign entities using digital assets to interfere in UK elections. The committee's report, covered extensively by the BBC, represents a broader cross-party escalation of those concerns.
The Industry's Response and What Comes Next
Natasha Powell, chief compliance officer at crypto exchange Kraken, told lawmakers that regulated exchanges are capable of managing much of the risk themselves. The committee wasn't persuaded. Its position is that the current framework simply doesn't have the staffing or the legal tools to verify donors, trace funds, and prevent abuse at the scale needed.
The moratorium is intended as a temporary measure, holding the line until Parliament passes Electoral Commission statutory guidance that can properly govern the space. Whether the government moves quickly enough to satisfy the committee before election season heats up is the key question now. Make sure to check out more:
