In a statement to MPs, Housing Secretary Steve Reed said he accepted Rycroft’s assessment “that the anonymity inherent in crypto transactions could make it easier to mask the origin of donations and evade robust checks on the true source of funds”.
“The clear route that this creates for the illicit channelling of money into our politics is unacceptable and undermines public confidence in our electoral system,” Reed said.
He said the crypto donations ban would “remain in place until the Electoral Commission and this Parliament are satisfied there is sufficient regulation in place”.
Reed said the temporary ban would be applied retrospectively to crypto donations of “any amount” from today, once changes to legislation have been made.
The housing secretary also said he was taking immediate action to cap donations from British citizens living overseas at £100,000 annually, in line with Rycroft’s review.
Parties would have 30 days to return any such donations received in the interim once the rules come into force, after which criminal penalties will apply.
This will apply to donations in all UK elections, including the upcoming English local elections, Scottish Parliament elections and Senedd elections, he said.
Reed said he would amend the government’s Representation of the People Bill to implement these two recommendations.
The latest Electoral Commission figures show Reform UK received a record £9m donation from cryptocurrency investor and aviation entrepreneur Christopher Harborne.
It is the largest ever single donation by a living person to a British political party.
Harborne, who is British but lives in Thailand, has previously given large sums to the Conservatives under former Prime Minister Boris Johnson’s leadership, as well as Reform UK’s predecessor the Brexit Party in 2019 and 2020.
In a post on X, external, Reform UK’s home affairs spokesman Zia Yusuf said his party had received “a large, perfectly lawful donation from a British Citizen, and Labour responds by rushing through a new law to prohibit him from making such a donation again”.
“This is how fast the machinery of government moves when it wants to protect itself,” Yusuf wrote.
He accused Labour of “choking off legal funding for its main rival”.
The Rycroft review says it has focused on the risks posed to the UK’s democracy by the deployment of foreign money.
It cites the case of Gill, and of the MI5 alert against Christine Lee, as examples of where the public have been alerted to techniques that can be used.
The report says “it is clear that foreign interference in our politics is real and persistent”.
At Prime Minister’s Questions. Sir Keir said the government would “act decisively to protect our democracy” following Rycroft’s recommendations.