The UK Parliament is preparing to address cryptocurrency donations in elections through amendments to the Representation of the People Bill, which would tighten controls on political financing and expand the Electoral Commission's powers.
The move follows recommendations from the Rycroft review, an independent inquiry into countering foreign financial influence in UK politics, which suggested a moratorium on electoral donations made using cryptoassets. The new proposal would go further, banning such donations entirely, including donations made from proceeds generated by crypto-assets.
Proposed Amendments
Two main amendments are under consideration. The first, by Angela Rainor of the Labour Party, would amend the Political Parties, Elections and Referendums Act 2000 to prevent donations to registered political parties being made in cryptoassets. However, critics argue this approach leaves potential loopholes, as it addresses only direct crypto funding.
A second amendment by Liam Byrne takes a broader approach, targeting the use of crypto exchanges or payment platforms as pathways to receive and process crypto payments that are later converted to fiat currency. This would prevent parties, candidates, and third-party campaigners from accepting donations in cryptoassets or from proceeds of cryptoassets, and specifically addresses memecoins as sources of financing.
Background
Political cryptocurrency donations have drawn increased scrutiny in the UK. Ben Delo, co-founder and former BitMEX executive, was revealed to have donated 4 million pounds to Reform UK, though the transaction was registered as a cash donation. Reform UK has faced other crypto donation controversies.
The final form of the cryptocurrency prohibition provisions will be determined in coming weeks.
