Is Crypto Funding A Risk To UK Politics? Lawmaker Seeks Temporary Ban

A senior UK security official is pushing for a temporary freeze on cryptocurrency donations to political parties, warning that foreign governments could exploit the hard-to-trace nature of digital currencies to quietly shape British politics.

Matt Western, who chairs the Joint Committee on National Security Strategy, sent a letter to Housing Secretary Steve Reed on Monday urging the government to act before the threat grows any larger.

Six Agencies, No Clear Leader — And A Problem That Keeps Growing

Western’s concern runs deeper than just donations. He pointed out that enforcing rules around political funding and foreign interference is currently split across six separate bodies — the Electoral Commission, the Metropolitan Police Service, Counter-Terror Policing, the National Crime Agency, MI5, and local police forces.

No single agency is clearly in charge. According to Western, that gap in leadership leaves the UK exposed. His letter recommends creating a dedicated national police unit focused entirely on political finance oversight and foreign interference risks — a longer-term fix to what he sees as a structural weakness in the current system.

He added that as the UK’s military role in Europe expands and its positions on issues like Ukraine and relations with the US and European Union become more consequential, the incentive for outside actors to meddle in British politics will only increase.

Strict Rules Proposed For Any Crypto That Does Get Accepted

Western did not call for a permanent ban. The moratorium he proposed would stay in place only until the Electoral Commission releases formal statutory guidance on how crypto donations should be handled.

Once that guidance is issued, the freeze would be lifted. But the rules he wants attached to any future crypto donations are strict. Reports say Western’s recommendations include requiring political parties to use only cryptocurrency platforms registered with the Financial Conduct Authority, the UK’s financial services watchdog.

Donations traced back to mixing services — tools commonly used to obscure the origin of funds — would be banned outright. Any crypto received by a political party would need to be converted into regular currency within 48 hours.

Western also pushed for stricter oversight of political donations, including checks on the source of donors’ wealth. He urged tougher penalties for breaking election finance laws and called for broader authority for the Electoral Commission to require banks and other institutions to disclose where donated funds originate.

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