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Transparency experts have warned that the source of cryptocurrency donations can be difficult to track. That raises concerns that foreign donations to political parties and candidates — banned in almost all circumstances under British law — as well as the proceeds of crime and money laundering could slip through the net.
Labour’s elections bill is also expected to place new requirements on political parties and their donors. It is set to include a clampdown on donations from shell companies and unincorporated associations, and could force parties to record and keep a risk assessment of donations that could pose a risk of foreign interference.
Crypto is an emerging battleground of foreign interference, with Russia and its intelligence services increasingly embracing digital currencies to evade sanctions and finance destabilization — such as in Moldovan elections — after being cut off from the global banking system following Moscow’s full-scale invasion of Ukraine.
Russian involvement in British politics has come under fresh scrutiny in recent months after Nathan Gill — the former head of Reform in Wales who was also an MEP in Farage’s Brexit Party — was jailed last month for over 10 years after being paid to make pro-Russian statements in the European Parliament.
Farage has strongly distanced himself from Gill, describing the former MEP as a “bad apple” who had betrayed him.
Nevertheless, Labour has since gone on the offensive, with Prime Minister Keir Starmer urging Farage to launch an internal investigation into Gill’s activities.
According to a spokesperson for the Ministry of Housing, Communities and Local Government, which has responsibility for the bill, “The political finance system we inherited has left our democracy vulnerable to foreign interference.
“Our tough new rules on political donations, as set out in our Elections Strategy, will protect U.K. elections while making sure parties can continue to fund themselves.”
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