The Government has imposed an immediate moratorium on cryptocurrency donations to political parties, announcing the measure will apply retrospectively from today while describing it as a necessary step to protect the integrity of British democracy.
Housing Secretary Steve Reed confirmed the ban following Prime Minister’s Questions, saying it would remain in place until “sufficient regulation is in place to ensure full confidence and transparency in donations being made this way.” The move follows the publication of the Rycroft review into foreign interference in British politics, conducted by former senior civil servant Philip Rycroft at Labour’s request.
The review was commissioned in the wake of the conviction of former Reform MEP Nathan Gill for accepting bribes to promote pro-Russian narratives. Presenting his findings this morning, Rycroft said the UK currently lacks “a coherent and robust strategy” to deal with foreign interference and warned that if public trust in democracy erodes, the consequences could be “very severe” and “extraordinarily damaging.”
The cryptocurrency ban has immediate implications for Reform UK, which last year received what was believed to be the largest political donation by a living person when British-born crypto tycoon Christopher Harborne, based in Thailand, gave £9 million to the party. Reform leader Nigel Farage has also personally invested £215,000 in a bitcoin scheme run by former Conservative chancellor Kwasi Kwarteng, who has since defected to Reform.
Farage responded in the Commons by pointing to the Government’s record on small boat crossings rather than addressing the substance of the measures directly.
Beyond the cryptocurrency ban, the Rycroft review made a series of broader recommendations. These include an annual cap on political donations from British citizens living abroad, a rule preventing any donor from giving more than their post-tax annual profits in a single year, and an outright ban on all foreign-funded political advertising. The review also called for the Lobbying Act to be amended to remove VAT exemptions for foreign-based entities.
On regulation, Rycroft recommended giving the Electoral Commission new powers to mandate annual reporting and accounts from political parties, allow greater information sharing with external agencies and require information to be provided in return. A new centre of police excellence focused on complex electoral law offences was also proposed, alongside a reduction in the burden of proof for criminal offences under electoral legislation.
The review identified threats from Russia, China and Iran, but also pointed to what it described as “a new threat” from allies including the United States, noting “an emerging willingness of foreign actors and private citizens, including from allies like the United States, to interfere in and influence politics abroad.”
The Electoral Reform Society called on the Government to go further and introduce an overall cap on all political donations, not just those from overseas. Director of Policy and Research Dr Jess Garland said trust in politics was at a record low and that reform of political funding rules was essential to ensure politicians remained focused on voters rather than donors.
