UK Urged to Temporarily Halt Crypto Donations to Political Parties Amid Foreign Interference Concerns

Matt Western, chair of the UK's Joint Committee on National Security Strategy, has called for a temporary suspension of cryptocurrency donations to political parties, citing potential foreign interference. According to Cointelegraph, Western addressed his concerns in a letter to Steve Reed, Secretary of State for Housing, Communities and Local Government, recommending the inclusion of a 'temporary moratorium' on crypto donations in the upcoming Representation of the People Bill. This moratorium would remain until the Electoral Commission provides statutory guidance. Western expressed worries about the increasing likelihood of foreign states attempting to influence UK political finance as the next election approaches. He noted that as the security environment deteriorates and the UK's military involvement in Europe expands, the incentive to sway UK political positions, particularly regarding Ukraine or US/EU relations, is likely to grow. In January, Western, along with other MPs chairing parliamentary committees, advocated for a complete ban on crypto donations in the Representation of the People Bill, warning of the potential for foreign states to use such payments to influence UK politics. However, the bill introduced to the House of Commons on February 12 did not include a full ban. Western argued that the Electoral Commission should mandate political parties to use only crypto services registered with the Financial Conduct Authority, the UK's financial services regulator. He suggested prohibiting donations involving mixers or originating from unknown sources and recommended that political parties convert received crypto to fiat within 48 hours. The next general election in the UK is required to occur by August 15, 2029, while the Representation of the People Bill is set for a second reading in the House of Commons on March 2. Western's letter also proposed longer-term solutions, including the establishment of a national police force dedicated to overseeing political finance and combating foreign interference. He highlighted the lack of a clear national enforcement lead for political finance and foreign interference risks, with responsibilities divided among various agencies such as the Electoral Commission, the Metropolitan Police Service, Counter-Terror Policing, the National Crime Agency, MI5, and local police forces. Additionally, Western recommended implementing source-of-wealth checks for donors, reviewing sentencing for electoral finance offenses, increasing penalties for breaches, and enhancing the Electoral Commission's powers to compel institutions to disclose donation sources. Reform UK became the first party to accept crypto donations in May last year, with leader Nigel Farage announcing at the Bitcoin 2025 conference in Las Vegas that the group is accepting Bitcoin (BTC) and other cryptocurrency contributions from eligible donors.