UK panel urges moratorium on crypto donations ahead of election

On March 18, the Joint Committee on the National Security Strategy released a report calling for an immediate moratorium on cryptocurrency donations to political parties and campaigns in the United Kingdom until Parliament approves statutory guidance from the Electoral Commission. The panel argues digital assets are difficult to track and could expose elections to abuse ahead of the next general election.

The committee recommends writing the temporary ban into the Representation of the People Bill and putting clear rules and enforcement powers in place before voters go to the polls. The report describes crypto as “an avoidable risk to political finance and public trust” and calls for “an immediate moratorium on crypto donations.”

The report points to the speed of crypto transfers and tools that can obscure sources of funds, including mixers, tumblers, privacy-focused coins, and “chain hopping” between blockchains. It also warns that artificial intelligence can split a large payment into many donations under £500 ($668), the level that normally triggers reporting.

Under current UK election law, donations over £500 must be reported and verified. The panel notes that crypto’s design and third-party tools can make it harder to link wallets to real identities. Even with a ban on direct crypto gifts, a donor could convert tokens into sterling and contribute through the banking system.

According to the committee, the existing framework lacks the tools and staff to verify donors, trace funds and prevent abuse. It wants the Electoral Commission to be able to compel information from banks, HM Revenue & Customs, and crypto platforms when it suspects impermissible activity, enabling faster checks across fiat and crypto rails.

Industry representatives appeared before the panel. Natasha Powell, chief compliance officer at crypto exchange Kraken, told lawmakers that regulated platforms can “manage much of the danger.” The committee was not persuaded that current safeguards are sufficient without stronger verification and tracing powers for authorities.

Parties are testing the space. Reform UK, led by Nigel Farage, plans to accept crypto donations, describing itself as the first European political party to do so. The party’s total crypto intake is not public. Crypto investor Christopher Harborne has given the party about $12 million in cash, according to disclosures.

Earlier this year, senior Labour members of Parliament urged Prime Minister Keir Starmer to prohibit cryptocurrency donations to political parties, warning crypto donations could open door to foreign influence.

The proposed pause would apply across parties and campaigns, covering direct crypto gifts and related in-kind transfers, until a formal rulebook is in place. The committee envisions the Electoral Commission at the center of implementation, with expanded powers to request records and resources to track digital-asset flows connected to campaigns.