In brief

  • Former Labour minister Rushanara Ali has become the latest UK MP to call for an outright ban on political donations in cryptocurrency.
  • Ali argued that crypto donations leave the UK open to "foreign interference in our democracy," echoing the concerns of anti-corruption groups.
  • To date, the only major party to accept crypto donations is Reform UK.

A former Labour minister has joined a growing chorus calling for the U.K. to ban political donations made in cryptocurrency.

Labour MP Rushanara Ali, who previously contributed to the government’s elections bill during her stint in the Ministry of Housing, Communities and Local Government, is quoted in a recent

report as calling for an outright ban on crypto political donations.

Ali called cryptocurrency donations a vector for “foreign interference in our democracy,” urging ministers to block “the use of cryptocurrencies to funnel money into British politics.”

She highlighted several ways in which cryptocurrency donations could be used to circumvent existing donation laws, including the use of multiple wallets with different addresses, fragmenting large donations into smaller amounts via crowdfunding in order to bypass reporting thresholds, and privacy coins.

Growing scrutiny

Ali is one of a number of British MPs who have advocated a blanket ban on crypto donations. In January, seven Select Committee Chairs wrote to the Prime Minister urging for an "explicit provision to disallow cryptocurrency donations," arguing that they leave the UK open to "hostile foreign interference."

Their concerns echo those of advocacy groups including the UK Anti-Corruption Coalition, which wrote to Ali last year, and Spotlight on Corruption, which earlier this month issued a briefing on banning crypto donations.

“Cryptocurrency donations carry huge risks of dirty money and foreign interference, but the Electoral Commission does not currently have the necessary powers to properly regulate these risks,” Spotlight on Corruption Susan Hawlet told

Decrypt
. She added that it would be “disproportionate” to expect small parties and individual candidates to take on the burden of preventing those risks, “particularly to accommodate a form of finance that is used by just 8% of the population, and whose use is heavily skewed towards high-income individuals.”

“Other jurisdictions like Ireland and Brazil have banned cryptocurrency donations—there is no current public domain evidence that this has caused significant displacement or problems,” Hawley added.

Last week, the Chair of the Joint Committee on the National Security Strategy recommended that the government introduce a temporary moratorium on parties accepting crypto donations, until the Electoral Commission produces statutory guidance.

The JCNSS further recommended that the Electoral Commission produce “more comprehensive interim guidance,” requiring parties to only use FCA-registered VASPs, only accept donations with “high confidence