UK Political Parties Banned From Taking Crypto Donations

British political parties will be banned from accepting donations in cryptocurrencies, Prime Minister Keir Starmer announced Wednesday, saying illicit finance poses a "stark" danger to the country's democracy. Starmer told lawmakers that "we will act decisively to protect our democracy" from outside meddling. "That will include a moratorium on all political donations made through cryptocurrencies," he said during the weekly Prime Minister's Questions session in the House of Commons. The move could be a financial blow to the hard-right party Reform UK, the AP reports. The party led by Nigel Farage is one of the few in Britain to accept cryptocurrency donations.

The government plans to bring in legislation to freeze cryptocurrency donations, which will be applied retroactively from Wednesday. The government also said it will put an annual cap of 100,000 pounds ($134,000) on donations by British voters living abroad. Reform has received 12 million pounds in the past year from Christopher Harborne, a British businessman based in Thailand, according to Electoral Commission figures. Reform lawmakers walked out of the House of Commons chamber after Starmer made the announcement. Reform UK deputy leader Richard Tice said the government was trying "to stop the incredible progress of Reform."

The party holds just eight of the 650 seats in the House of Commons but consistently leads both Starmer's governing Labour Party and the main opposition Conservatives in opinion polls. Tice told broadcaster GB News that "cryptocurrencies are a perfectly legitimate way of investing, of earning within the law."

• Britain has strict limits on how much political parties can spend on elections, but they can accept unlimited donations, as long as the donors are UK voters or companies registered in Britain.
• In a report published Wednesday, former senior civil servant Philip Rycroft expressed concern that untraceable digital currency donations could be "used as the vehicle to channel foreign money into the political system in the UK." He advised that crypto donations should be banned temporarily until regulation catches up with the technology.

• In his independent review, Rycroft also said the government should consider a cap on individual donations "if it wishes to restore confidence in the political process and to keep big money out of UK politics," the Guardian reports.
• The government ordered Rycroft to review foreign financial interference in politics in December after several high-profile incidents, including the jailing of former Reform UK politician Nathan Gill for taking bribes to make pro-Russian statements in the European Parliament.