UK Parliament Moves to Ban Crypto Donations in Election Bill

The UK Parliament is set to tighten rules on political financing by potentially banning cryptocurrency donations outright. The proposal, expected to be incorporated into the Representation of the People Bill after the summer recess, follows recommendations from the independent Rycroft review.

Background and Review Recommendations

The Rycroft review, commissioned to address foreign financial influence in UK politics, advised a moratorium on electoral donations made using crypto‑assets. It suggested that any lifting of the moratorium should only occur once Parliament and the Electoral Commission are confident that effective regulation is in place.

Proposed Legislative Amendments

Two amendments are under consideration:

• Amendment by Angela Rainer (Labour Party): Modifies the Political Parties, Elections and Referendums Act 2000 to prevent direct donations to registered political parties in crypto‑assets.
• Amendment by Liam Byrne: Extends the ban to cover crypto exchanges and payment platforms that could be used to convert crypto into fiat, aiming to stop parties, regulated donees and candidates from accepting crypto‑derived funds, including those from memecoins.

Concerns Over Loopholes and Foreign Influence

Critics argue that limiting the ban to direct crypto donations may leave gaps, such as the use of exchanges or low‑profile tokens. The mention of a “Trump token” highlights worries that foreign actors could exploit meme‑coins to funnel money into UK politics.

High‑Profile Cases Highlighting the Issue

Recent scrutiny has focused on crypto‑wealthy individuals, such as Ben Delo, who donated £4 million to Reform UK. Although the donation was recorded as cash, the episode underscores the growing intersection of crypto wealth and political funding.

Next Steps

The exact wording and scope of the ban will be debated in the coming weeks, with the Electoral Commission’s powers likely to be expanded to enforce the new rules.