UK lawmakers are sounding the alarm over the growing use of cryptocurrency in political donations, warning it could expose the system to foreign interference and weaken public trust. In its latest report, the Joint Committee on the National Security Strategy called for an immediate moratorium on crypto donations to political parties, describing the risks as “unnecessary and unacceptably high.”
Lawmakers flag risks to political integrity
The committee urged the government to amend the Representation of the People Bill currently under review to block such contributions until stronger safeguards are implemented.
Chair of the committee, Matt Western, emphasised the urgency of the issue, noting that public confidence in politics is already fragile. He warned that perceptions of politicians being influenced by hidden or foreign money could further erode trust in democratic institutions.
Cryptocurrency donations pose an unnecessary and unacceptably high risk to the integrity of UK political finance.
We also need tighter rules on overseas donors; a new national police unit to oversee political finance; and tougher criminal liability.
🧵 1/2 pic.twitter.com/otVxAz8eVn— Joint Committee on the National Security Strategy (@JointCtteNSS) March 18, 2026
The report highlights how certain crypto tools, including mixers, privacy coins, and cross-chain swaps, can obscure the origin of funds, making it difficult to verify whether donations comply with electoral laws. Lawmakers also raised concerns about emerging technologies like AI, which could enable “micro-donation” strategies that split large sums into smaller, less scrutinised payments.
Earlier this month, Labour MP Rushanara Ali of the Labour Party claimed that cryptocurrency donations enable “foreign interference in our democracy,” pointing to methods like micro-donations and using multiple digital wallets to circumvent financial disclosure regulations.
Calls for tighter controls instead of outright ban
While the committee supports a temporary ban, not all experts agree that prohibition is the best path forward. Some argue that crypto transactions can remain traceable when processed through regulated systems, suggesting that better oversight, not restriction, could address the risks.
Recent proposals from MPs include requiring donations to pass through Financial Conduct Authority-registered virtual asset service providers, enforcing stricter identity and source-of-wealth checks, and banning the use of anonymising tools such as mixers. There are also calls for political parties to convert crypto donations into pounds immediately, reducing exposure to volatility and potential misuse.
The debate comes amid increasing political engagement with digital assets. According to reports, Reform UK has previously accepted crypto donations, though the party maintains it does not allow anonymous contributions and applies standard compliance checks.
Despite differing views, the committee maintains that the current system leaves too much room for abuse. Until stronger protections are in place, it argues, the safest course is to shut the door on crypto funding in politics altogether.
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