- Ministers push tighter rules as Reform UK’s crypto donations face scrutiny.
- SFO investigation intensifies pressure on UK authorities monitoring crypto activity.
- Proposed ban could reshape political funding and influence global regulatory approaches.
UK ministers are weighing a ban on political donations made through cryptocurrency as discussions on the Elections Bill intensify. According to senior officials, the proposal has accelerated amid rising concerns about transparency and the influence of undisclosed donors.
Reform UK remains at the centre of the debate because it became the first major political party in the UK to accept Bitcoin and other tokens. Nigel Farage announced the policy at a cryptocurrency event in Las Vegas, which shifted government attention toward the risks linked to digital contributions.
Besides generating excitement among crypto supporters, the decision raised questions about the anonymity of transactions. Critics argue that the ease of transferring assets across borders without bank style verification increases the threat of hidden political funding.
Additionally, Pat McFadden urged regulators in July to consider a full prohibition due to concerns about traceability and potential interference from overseas actors. His remarks encouraged ministers to revisit previous drafts of the Elections Bill that excluded digital donation rules.
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Growing uncertainty for crypto backed political funding
Ministers are now studying whether a specific ban should be added to the legislation, marking a notable shift from earlier positions. This change reflects rising pressure to strengthen oversight as parties explore alternative funding methods.
Moreover, officials say Reform UK’s promotion of cryptocurrency donations contributed to the renewed scrutiny. The party framed digital assets as a modern tool to attract younger voters, which pushed regulators to reassess gaps in political finance rules. Consequently, analysts warn that a UK ban could influence global policymaking. Several jurisdictions may consider similar moves if Britain introduces restrictions on cryptocurrency within political campaigns.
Furthermore, the proposal challenges parties that use digital assets to project an innovative public image. Tighter controls could alter perceptions of cryptocurrency and encourage more cautious political engagement with the sector.
Supporters of Reform UK argue that crypto donations expand participation and provide flexible options for small donors. However, government advisers continue to stress the importance of transparency and clearly verifiable funding channels. If ministers approve the ban, political groups expect detailed enforcement guidance outlining compliance obligations. Market observers say stricter rules may also affect how investors interpret the broader regulatory direction for digital assets.
SFO Investigation Adds Pressure to Crypto Oversight
The UK’s Serious Fraud Office has opened a major investigation into the collapse of Basis Markets, which raised $28 million before shutting down. According to officials, the project completed two fundraising rounds in late 2021 before announcing its closure in June 2022.
Following the shutdown, investors questioned whether regulatory changes truly caused the project’s failure or whether it collapsed under fraudulent activity. Investigators, alongside Metropolitan Police and West Yorkshire Police, raided properties in Herne Hill and near Bradford and arrested two men on fraud and money laundering charges.
UK ministers continue to deliberate on the proposed crypto donation ban, and the outcome may reshape both the country’s political funding system and the wider regulatory environment surrounding digital assets.
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