- A UK parliamentary committee has called for a temporary ban on cryptocurrency donations to political parties.
- The proposed rules would require converting crypto to sterling within 48 hours and ban donations from unregistered firms or mixers.
- Reform UK is the only major party currently accepting such donations, receiving over $25.6 million from a Tether shareholder.
UK politicians urged a temporary halt on crypto political donations this week, citing national security fears over foreign interference. The Joint Committee on the National Security Strategy made its recommendation in a letter to Communities Secretary Steve Reed.
The committee’s chair, Matt Western, proposed five interim measures for the government. These include a donation ban until official guidance is published and prohibiting crypto from mixers like Tornado Cash.
Consequently, all donations would need conversion to sterling within two days. Crypto could only be accepted from firms registered with the Financial Conduct Authority and when its origin is clear.
However, Kraken’s Chief Compliance Officer, Natasha Powell, warned a ban would backfire. “If you say, ‘No crypto donations, they’re illegal,’ people will go offshore and find different ways of doing them,” she said.
Meanwhile, the proposed rules directly impact Reform UK, the only major party openly accepting crypto. The party has received over $25.6 million from Tether shareholder Christopher Harbourne and reportedly undisclosed crypto sums.
This has prompted rivals to call for an investigation into potential conflicts of interest. Labour and Liberal Democrat MPs argue such donations reportedly risk undermining public trust in the political system.
Furthermore, Farage ally George Cottrell is linked to a Polymarket wallet that profited from prediction markets. Cottrell was previously convicted of wire fraud in a Bitcoin extortion case.
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