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Government Action Taken
The UK government led by Prime Minister Keir Starmer has imposed an immediate moratorium on cryptocurrency donations to political parties.
“Led by Prime Minister Keir Starmer, the U.K. government has announced an immediate moratorium on cryptocurrency donations to political parties, citing concerns that digital assets could be used to hide the origins of foreign money in British politics.”
This move follows an independent review commissioned by the government that highlighted risks posed by anonymous digital payments to the integrity of the UK political system.
The moratorium covers donations of any size and takes effect immediately.
Parties have 30 days from legislation passage to return any crypto received, after which criminal penalties apply.
The government also implemented a cap of £100,000 annually on donations from British citizens living abroad.
These measures address significant gaps in existing regulations that could be exploited for foreign influence.
Rycroft Review Findings
The moratorium is based on findings from the Rycroft Review, a comprehensive 50-page independent assessment led by former senior civil servant Philip Rycroft.
The review identified several specific risks associated with cryptocurrency donations in politics.
These include incomplete regulatory framework, difficulty tracing ultimate ownership, and proliferation of different crypto vehicles.
Rycroft emphasized the measure should be understood as a 'pause' rather than a permanent prohibition.
The review warned that 'foreign interference in our politics is real and persistent.'
The UK is identified as a target for espionage from Russia, China and Iran.
The review also noted emerging threats from allies like the United States.
Targeting Reform UK
The moratorium directly impacts Nigel Farage's Reform UK party, which has been the most prominent and active political party in accepting cryptocurrency donations.
“Last year, the populist Reform UK became the first British party to announce it would accept donations in the form of bitcoin and at least two-thirds of its money raised came from donors abroad.”
Reform UK became the first British party to announce it would accept Bitcoin donations in May 2025.
Its largest donor, Thailand-based Christopher Harborne, has donated £12 million to the party over the past year.
This includes a single £9 million contribution.
According to reports, at least two-thirds of Reform UK's fundraising has come from donors based abroad.
The Electoral Commission has noted that Reform UK has not shared any crypto wallet addresses with the regulator.
During Starmer's announcement in Parliament, Reform UK MPs walked out in protest.
Implementation Details
The government will implement the crypto moratorium through amendments to the Representation of the People Bill currently before Parliament.
The new rules apply retrospectively to any crypto donations received from Wednesday onward.
Donors could still convert crypto holdings to fiat currency and donate the proceeds, subject to traditional anti-money laundering checks.
Philip Rycroft emphasized the moratorium was for democratic processes, not protecting any party's interests.
The legislation includes a mechanism to lift the moratorium once adequate regulation is in place.
Liberal Democrats criticized Reform UK, calling for Farage to return crypto donations from anonymous overseas sources.
Regulatory Context
The review noted that no crypto donations have yet reached the reporting threshold requiring disclosure.
“Rycroft wrote that the scale of crypto political donations is currently unknown because none have yet reached the reporting threshold that would require disclosure to the Electoral Commission. Still, the report argued that political crypto donations could be allowed under 'tight supervision' by the Electoral Commission and through UK-regulated cryptocurrency exchanges. Rycroft added that the temporary pause in the political crypto donations should not be seen as a 'prelude to an outright and permanent ban,' but rather an 'interlude' allowing the regulatory environment to catch up to the reality of crypto.”
Rycroft wrote that the temporary pause should not be seen as a 'prelude to an outright and permanent ban.'
Instead, it should be viewed as an 'interlude' for regulatory environment to catch up.
The review suggested crypto donations could be allowed under 'tight supervision' by Electoral Commission.
This comes amid heightened scrutiny of crypto and foreign-linked money in British politics.
Follows jailing of Reform UK's former Welsh leader Nathan Gill for pro-Russia bribes.
The UK Parliament's Joint Committee had previously described crypto in UK politics as an 'unacceptably high risk'.