A group of seven senior Labour MPs is asking Prime Minister Keir Starmer to ban cryptocurrency donations to political parties and wants this ban to be included in the UK election bill that is expected to be introduced ahead of the local elections in 2026. They are arguing that the crypto donations are a serious risk to democracy.
Three Risks Driving Calls to Ban Crypto Political Donations
The MPs say that the crypto donations create three major problems.
- Lack of transparency: Cryptocurrency can hide the sender of the money, and it would be very hard to find out who is donating to the politicians.
- Foreign Interference risk: Elections could be influenced by hidden donors, including foreign actors and illegal sources, without voters or regulators being able to see it, which breaks the normal political finance rules.
- Easy to escape from the donation limits – Crypto can be split into many small payments that fall below disclosure thresholds.
The UK Government acknowledges the risks but officially says that the full ban may be too complex to implement immediately. As a result, the ban may not be included in the upcoming elections bill. So even though the ministers and MPs accept the danger, they are moving slowly.
The debate is heating up now because Reform UK became the first UK political party to accept crypto donations. Things become more serious when it is revealed that Reform UK received a 9 million GBP donation from a crypto investor in traditional fiat currency, not crypto. This made lawmakers worry that crypto wealth is entering politics.
The major reason for this debate is not about crypto technology but about building trust in the election. These lawmakers could fear that the crypto could undermine the political and financial rules, and voters won’t know who is backing political parties. That’s why Labour MPs are calling for a complete ban, and the support for the ban is growing beyond the Labour MPs.
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