UK Parliament Prepares to Ban Crypto Donations in Election Bill

The UK Parliament is preparing to amend its election laws to ban cryptocurrency donations, following recommendations from the Rycroft review in April. The review suggested a moratorium on these donations, but the new proposal would make them entirely prohibited, including those made from the proceeds of crypto-assets.

This move comes as part of the Representation of the People Bill, which aims to tighten controls on political financing and expand the Electoral Commission's powers. Currently, several different proposals are being discussed regarding this issue, with some focusing on direct crypto funding and others addressing the use of crypto exchanges or payment platforms as pathways for receiving and processing crypto payments.

One proposal, presented by Angela Rayner of the Labor Party, would amend the Political Parties, Elections and Referendums Act 2000 to prevent donations to registered political parties being made in cryptoassets. However, Spotlight on Corruption's Senior Advocacy Advisor Tim Picton has expressed concerns that this amendment does not go far enough, as it leaves out crypto exchanges and memecoins.

Another proposal, presented by Liam Byrne, would address the use of crypto exchanges or payment platforms to receive and process crypto payments, which would then be converted to fiat and received in cash by political parties. Byrne's goal is to 'prevent parties, regulated donees (including third-party campaigners) and candidates from accepting donations in cryptoassets or from the proceeds of cryptoassets,' specifically mentioning memecoins as sources of this financing.

The issue of political cryptocurrency donations has been in the spotlight in the UK, with several high-profile controversies involving crypto-made millionaires donating to political parties. For example, Ben Delo, co-founder and former BitMEX executive, donated 4 million pounds to Reform UK, but registered the transaction as made in cash.