UK MP Proposes Temporary Ban on Crypto Donations

TLDR

• Matt Western urged the UK government to pause political crypto donations over foreign interference concerns.
• He asked ministers to add a temporary moratorium to the Representation of the People Bill.
• Western said hostile states could use crypto channels to influence UK political finance.
• He proposed that parties use only Financial Conduct Authority-registered crypto services.
• He also recommended banning donations linked to mixers or unknown sources.

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A senior UK lawmaker has urged the government to pause political crypto donations over foreign interference risks. Matt Western sent a formal letter on Monday to Housing Secretary Steve Reed outlining the proposal. He asked ministers to insert a temporary moratorium into the forthcoming Representation of the People Bill.

Western chairs the Joint Committee on the National Security Strategy and raised concerns about election security. He warned that hostile states could exploit crypto channels to influence UK politics. Therefore, he called for swift legislative action before the next general election.

Proposed moratorium on crypto donations

Western urged ministers to add a “temporary moratorium” on crypto donations to the Representation of the People Bill. He said lawmakers should lift the pause once the Electoral Commission issues statutory guidance. He stated, “We are concerned that a foreign state’s intent to interfere in UK political finance may extend to the next election.”

He linked the proposal to current security pressures and the UK’s military role in Europe. He said that influencing UK positions on Ukraine or US and EU relations could hold value. Therefore, he pressed the government to act before the bill’s second reading on March 2.

Earlier in January, Western and other committee chairs backed a full ban on crypto donations. However, the bill introduced on Feb. 12 did not include that prohibition. The next UK general election must take place by Aug. 15, 2029.

Ban funds from crypto mixers and anonymous sources

Western asked the Electoral Commission to require parties to use crypto services registered with the Financial Conduct Authority. He said parties should reject donations that involve prior use of crypto mixers. He also said parties should refuse funds that come from unknown sources.

He proposed that political parties convert any received crypto into fiat within 48 hours. He argued that clear rules would reduce the risk of illicit or foreign-linked contributions. He also called for mandatory source-of-wealth checks for donors.

Western recommended stronger penalties for breaches of electoral finance rules. He urged a review of sentencing for related offenses. He also sought expanded powers for the Electoral Commission to compel disclosure of donation sources.

Reform UK and acceptance of Bitcoin donations

Western’s letter outlined longer-term enforcement changes across several agencies. He said no single national body leads political finance enforcement. He listed the Electoral Commission, Metropolitan Police, Counter-Terror Policing, National Crime Agency, MI5, and local forces.

He proposed creating a national police force dedicated to overseeing political finance. He said authorities currently split responsibilities across multiple bodies. He added that coordination gaps may hinder oversight efforts.

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