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Donations made in cryptocurrencies to UK political parties will be banned with immediate effect, with a cap placed on all donations coming from overseas voters, as Keir Starmer’s Government responds swiftly to a landmark review into foreign interference in British politics.
The Philip Rycroft review into foreign interference in British politics, was launched in the wake of Reform UK’s former Welsh leader Nathan Gill being jailed last year for taking pro-Russian bribes.
Published on Wednesday, the report calls for “robust action” to counter the threat of meddling in UK politics from hostile foreign actors.
Rycroft wrote: “I am not pressing the panic button…But I am ringing the alarm bell. If Government does not act swiftly to gear up to counter these threats, there is a real risk they will run away from us.”
He pointed to recent allegations of attempted foreign interference in the electoral process in Moldova and Romania which “should serve as cautionary tales”, adding: “It is a truism, but one apt for our times: the price of freedom is eternal vigilance.”
Starmer’s Government has welcomed the report, and in a surprise move, pushed forward several changes recommended to apply from today.
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Ministers say the rapid action is to avoid the threat of ‘malign actors’ using a window of opportunity to rush in compromised cash or crypto into UK politics.
Communities secretary Steve Reed told the Commons on Wednesday afternoon: “We will introduce an amendment to the Representation of the People Bill to place a moratorium on all political donations made through cryptocurrency.”
The action follows investigations by Byline Times into the funding of Nigel Farage’s Reform UK.
Reform is so far the only major party which accepts donations in crypto, though as Byline Times first reported, two smaller parties also accept them – the far-right Homeland Party and the tech-focused Other Party.
Questions over the source of these donations have been raised, after this publication revealed that Farage’s party has not shared the addresses of any of its digital crypto ‘wallets’ with the Electoral Commission, drastically limiting the election watchdog’s ability to monitor where it is getting its money from.
Despite announcing their intention to accept crypto donations, no such donations over the £500 threshold have been reported by Reform to the regulator so far.
However, the indefinite ban will also apply to crypto donations in any amount – including those which fall below the current £500 threshold for funds to count legally as a donation.
In his statement Reed pointed to “specific risks” posed by cryptocurrency donations, “such as the risk of rapid, multiple, small donations being made just below our current thresholds.”
There remain questions over whether the new ban will prevent all crypto donations from reaching Reform. Recent reporting by the Observer suggests that the party has been converting donations from crypto to cash, before accepting them, therefore potentially hiding the original source of the donations.
A report by the Times earlier this year also raised questions about whether the party has been funneling donations through third parties, in order to sidestep electoral rules. According to the report, a churchwarden who works for the family of a Kazakhstan-born billionaire was revealed as the man behind £200,000 worth of donations to Farage’s party, despite not obviously having sufficient funds to fund the donations himself.
The Elections Watchdog Doesn’t Know Where Reform UK’s Crypto Donations Are Coming From
The UK’s electoral watchdog tells Byline Times it wants tough new legal powers to prevent overseas donors from secretly bankrolling British political parties
The ban on crypto donations is initially being implemented as a moratorium. In his statement, Reed said “This moratorium [on crypto donations] will remain in place until the Electoral Commission and this Parliament are satisfied there is sufficient regulation in place to ensure full confidence and transparency in donations being made in this way.”
It will be applied retrospectively to any crypto donations received from today by any political parties and regulated entities, assuming the Representation of the People Bill passes as expected.
“Once the provisions are in force, if a political party or regulated entity has received a [crypto] donation in the interim, they will have 30 days to return it, after which enforcement action can be taken and criminal penalties will apply. This will again apply to all elections in the United Kingdom,” Reed said.
The Government will place another amendment to the Representation of the People Bill to place an annual cap on the total political donations an overseas elector can make. The cap will be set at £100,000 a year.
It comes after Thailand-based Reform UK donor – and crypto investor – Christopher Harborne – donated £12 million to the party over the past year from abroad, making him the largest ever individual donor to a UK party.