Cryptocurrency donations are sparking fresh concerns over political funding transparency
The first cryptocurrency donation to a major political party has reportedly been “made, but not declared” to the Electoral Commission.
According to The Observer, Reform UK reportedly informed the commission that it received a crypto donation in recent weeks.
The value of the donation has yet to be declared, but parties only need to notify the electoral body if it is more than £11,180.
Parties must declare donations within 30 days of the end of the quarterly reporting period. For example, a donation received between 1 October and 31 December must be declared by 30 January.
There is no indication that Reform has broken any rules regarding declaring the donation.
A Reform spokesman told The Observer: “All donations above the reporting limit will be disclosed in the usual way.”
Nigel Farage proudly declared that Reform would become the first political party to accept cryptocurrency donations at a bitcoin conference in Las Vegas in May.
On Monday, Farage spoke at another bitcoin conference where he declared himself “a champion” of the crypto sector.
But anti-corruption campaigners warn that Reform accepting cryptocurrency donations will enable untraceable foreign interference in UK politics.
As an EU Today article notes, traditional bank transfers, which are recorded and subject to UK anti-money-laundering rules and transparency requirements.
Meanwhile, cryptocurrency donations can pass through multiple digital wallets, making it difficult to trace their true origin.
Reform’s website requires all crypto donors to prove their identity through a third-party service. While this tracks the donor, it doesn’t track where the donor got the money from, which creates a loophole for foreign or illicit donations.
In addition, Radom, Reform’s crypto payments processor, is based in Poland and is not regulated by the Financial Conduct Authority (FCA). This means it falls outside the regulator’s anti-money-laundering supervision.
Campaigners have also raised concerns that the Electoral Commission doesn’t have the resources or expertise to scrutinise crypto donations.
Campaign group Spotlight on Corruption is calling for the Government to look at prohibiting cryptocurrency donations altogether.
Labour MP Liam Byrne is organising a cross-party campaign to demand a total ban on crypto in political donations.
Susan Hawley, executive director at campaign group Spotlight on Corruption, told The Observer: “It is not clear that either political parties themselves or the Electoral Commission have the expertise and knowhow to prevent anonymous crypto donations from illegal donors. It leaves the UK extremely vulnerable to interference from hostile foreign powers and even organised crime gangs.”
Hawley added that the Electoral Commission should urgently introduce safeguards against crypto donations. She also said that Labour’s forthcoming elections bill should include a ban on them.
The Electoral Commission said in a statement that no political party has yet reported any cryptocurrency donations.
They added: “We do not routinely share details of unpublished donations before quarterly publications.”
Olivia Barber is a reporter at Left Foot Forward
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