Amid rising concerns that foreign powers could exploit untraceable cryptocurrency to sway British politics, UK Cabinet Office Minister Pat McFadden has called for election officials to consider banning political donations made in digital currencies.
Key Takeaways:
UK minister Pat McFadden has asked for a review of crypto political donations.
Campaigners warn that unregulated crypto donations could enable covert foreign influence.
Lawmakers call for stronger enforcement and transparency.
Speaking to MPs, McFadden said tracing crypto donations is challenging, urging the Electoral Commission to review whether current rules are fit for purpose in the evolving digital age.
McFadden’s remarks follow Nigel Farage’s announcement that his Reform UK party would become the first British political group to accept Bitcoin donations, echoing moves by Donald Trump’s 2024 campaign.
Crypto Donations Could Enable Covert Foreign Interference in Politics
Campaigners like Spotlight on Corruption warn that such practices could open doors for covert foreign interference, undermining democratic processes.
During a joint Commons and Lords committee session on national security, Labour MP Liam Byrne pressed McFadden on the issue, prompting the minister to stress the importance of transparency and legislative updates to protect the integrity of political funding.
Further concerns were raised about donations from “unlimited companies,” whose financial records are difficult to scrutinize.
Both McFadden and Byrne agreed that strengthening resources for the Electoral Commission and the National Crime Agency is essential to better police political finances.
Byrne described current party finance rules as a “Kremlin’s charter” favoring opacity, calling for bans on crypto donations and foreign money, alongside enhanced enforcement.
While McFadden’s comments signal openness to tighter crypto donation controls, government sources indicate upcoming election reform proposals may stop short of an outright ban.
Instead, the forthcoming strategy paper is expected to tighten general foreign interference rules, extend them to digital currencies, and promote voter registration reforms, such as lowering the voting age to 16 and protecting candidates from abuse.
Transparency campaigners remain wary that the government may avoid capping donations or restoring the Electoral Commission’s criminal investigation powers.
As calls grow for stronger donation checks, including peer Margaret Hodge and democracy advocate Tom Brake, the debate continues over how to safeguard UK democracy against evolving threats in the digital era.
UK to Enforce Mandatory Crypto Trade Reporting
The UK will require crypto firms to collect and report detailed customer information on every trade and transfer starting January 1, 2026, as part of a sweeping effort to strengthen tax compliance and oversight in the digital asset sector.
According to a recent statement from HM Revenue and Customs (HMRC), the new rules will mandate that platforms record full names, home addresses, and tax identification numbers for all users.
Each transaction must also be logged with specifics such as the cryptocurrency used and the amount transferred.
The reporting obligation extends beyond individual users to include companies, trusts, and charities engaged in crypto activity.
Firms that fail to comply or submit inaccurate data may face penalties of up to £300 ($398) per user.
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