Senior Labour MPs are pressing Prime Minister Keir Starmer to ban cryptocurrency donations to political parties, arguing that digital assets weaken transparency and heighten the risk of overseas interference. The central concern is that crypto donations can be harder to trace and easier to obscure than traditional political funding.
The push has gained momentum after Reform UK said in May 2025 that it would accept cryptocurrency donations, triggering renewed pressure from backbenchers and committee figures for the government to act as it prepares electoral reform measures. This development has turned a theoretical risk debate into a live policy question for party finance rules.
1/. Seven Select Committee Chairs have written to the PM urging a ban on cryptocurrency donations to political parties in the #ElectionsBill.
Crypto is opaque, hard to trace, vulnerable to foreign interference & a growing risk to democratic integrity.
We should make clear NOW… pic.twitter.com/9XOXllixtu
— Liam Byrne MP (@liambyrnemp) January 12, 2026
Why Labour MPs want a ban
Senior Labour members have formally petitioned for a ban on crypto-based political donations, insisting that political finance must remain “transparent, traceable and enforceable.” Their argument is that the mechanics of digital assets can undermine existing disclosure and verification expectations.
They point to three specific vulnerabilities: donor origin can be difficult to verify, multiple small transfers can potentially skirt reporting thresholds, and enforcement tools can struggle to link on-chain activity to accountable individuals. The fear is that opacity and fragmentation could be used to route funds in ways that defeat practical oversight.
The Electoral Commission’s warnings about tracing challenges are being cited as a key justification for excluding crypto from party fundraising unless strong identification and oversight mechanisms are in place. The policy logic is that if administrators cannot reliably verify source and legitimacy, the donation channel should not be permitted.
Reform UK’s move and the government’s next steps
The debate sharpened after Reform UK, led by Nigel Farage, became the first British party to accept crypto donations in May 2025 and then advocated broader pro-crypto measures such as a Bitcoin reserve and tax reductions. This combination of accepting crypto donations while promoting crypto policy priorities has intensified scrutiny around electoral integrity.
Government discussions—referenced in recent media reporting—suggest ministers are considering a prohibition as part of broader electoral reform, but they also acknowledge technical complexity and appear to favor further deliberation rather than an immediate statutory change. That posture implies policy direction may be forming, but timelines and legislative details remain uncertain.
For campaign teams and crypto stakeholders, the near-term impact is operational uncertainty: parties that accept crypto could face heightened scrutiny and potential restrictions later, and intermediaries that facilitate political donations could be pulled into tighter compliance expectations if rules change. The risk is that today’s permissive posture could shift quickly once an Elections Bill crystallizes into enforceable language.
Investors and political actors are now watching the Elections Bill process for concrete measures that indicate how the UK intends to balance digital-asset activity with the transparency standards expected in democratic finance. The key test will be whether the government prioritizes enforceability and traceability over keeping crypto donation channels open.
