UK Minister Calls for Prohibition of Cryptocurrency Donations in Politics Due to Concerns Over Foreign Influence

In light of increasing worries that foreign entities might leverage untraceable cryptocurrencies to influence British politics, UK Cabinet Office Minister Pat McFadden has urged election officials to contemplate prohibiting political contributions made in digital currencies.

Key Takeaways:

• UK minister Pat McFadden has requested a review of cryptocurrency political contributions.
• Advocates caution that unregulated crypto donations could facilitate hidden foreign influence.
• Legislators are advocating for enhanced enforcement and transparency.

Addressing MPs, McFadden noted the difficulties in tracking crypto donations, encouraging the Electoral Commission to assess whether existing regulations are adequate in the rapidly changing digital landscape.

McFadden’s comments follow Nigel Farage’s declaration that his Reform UK party would be the first British political organization to accept Bitcoin donations, mirroring actions taken by Donald Trump’s 2024 campaign.

Crypto Donations Could Enable Covert Foreign Interference in Politics

Advocates such as Spotlight on Corruption caution that these practices could pave the way for hidden foreign interference, jeopardizing democratic integrity.

During a joint session of the Commons and Lords committee focused on national security, Labour MP Liam Byrne questioned McFadden on the matter, leading the minister to emphasize the necessity of transparency and legislative revisions to uphold the integrity of political financing.

Additional concerns were expressed regarding contributions from “unlimited companies,” whose financial records are challenging to examine.

Both McFadden and Byrne concurred that enhancing resources for the Electoral Commission and the National Crime Agency is crucial for more effectively monitoring political finances.

Byrne characterized the current party finance regulations as a “Kremlin’s charter” that promotes opacity, advocating for prohibitions on crypto donations and foreign funding, along with stronger enforcement measures.

NIGEL FARAGE’S REFORM UK BECOMES THE 1ST PARTY IN BRITAIN TO ACCEPT #BITCOIN DONATIONS pic.twitter.com/9ZQXtvNPIL

— The Bitcoin Conference (@TheBitcoinConf) May 29, 2025

While McFadden’s statements indicate a willingness to consider stricter controls on crypto donations, government sources suggest that forthcoming election reform proposals may not include a complete ban.

Instead, the anticipated strategy document is likely to tighten general foreign interference regulations, extend them to digital currencies, and advocate for voter registration reforms, such as lowering the voting age to 16 and safeguarding candidates from harassment.

Transparency advocates remain cautious that the government might refrain from imposing limits on donations or reinstating the Electoral Commission’s powers for criminal investigations.

As demands for more robust donation checks increase, including from peer Margaret Hodge and democracy proponent Tom Brake, the discussion continues regarding how to protect UK democracy from emerging threats in the digital age.

UK to Enforce Mandatory Crypto Trade Reporting

The UK will mandate that cryptocurrency firms gather and report comprehensive customer information on every trade and transfer starting January 1, 2026, as part of a broad initiative to enhance tax compliance and oversight within the digital asset sector.

According to a recent announcement from HM Revenue and Customs (HMRC), the new regulations will require platforms to document full names, residential addresses, and tax identification numbers for all users.

Each transaction must also be recorded with details such as the cryptocurrency utilized and the amount transferred.

The reporting requirement extends beyond individual users to encompass companies, trusts, and charities involved in crypto activities.

Firms that do not comply or provide inaccurate information may incur penalties of up to £300 ($398) per user.

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