The UK government is planning to ban political parties from accepting cryptocurrency donations as part of new election reforms, according to people familiar with developing legislation.
The ban would impact Nigel Farage’s Reform UK, which announced last May that it would accept such donations as part of its push to cultivate a pro-crypto image.
As reported by POLITCO, the UK government hasn’t denied these reports, and instead claims it will “set out further details in our Elections Bill.”
The bill will reportedly restrict donations from shell companies and unincorporated associations and could compel parties to carry out a risk assessment of any donations that could pose a risk of foreign interference.
It also includes plans to lower the voting age to 16, and implement an automatic voter registration scheme that would help bring eight million unregistered people onto the electoral register.
The Guardian reports that government ministers are working on the crypto donation ban, but that the restrictions wouldn’t be ready for the Election Bill in the new year, as it requires more time to implement.
Multiple ministers reportedly expressed concern over how difficult it is to trace crypto, and other government sources claimed that the Electoral Commission, the country’s election watchdog, is concerned about verifying the origins and ownership of crypto donations.
Reform UK loved by Bitfinex/Tether shareholder
Donations tracker DonationWatch records that since the party was launched as the Brexit Party, it’s raised over £20 million ($26 million) in donations. It’s unclear how much of this is through crypto.
DonationWatch also logs that the Bitfinex and Tether shareholder Christopher Harborne has donated over £10 million ($13 million) to the party. Protos previously reported how Harborne is Farage’s largest personal donor.
Fiano Cottrell, the mother of one of Farage’s close allies, George Cottrell, has also donated £750,000 to Reform UK.
A timeline of Reform UK/Brexit Party donations collated by DonationWatch.
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George Cottrell was previously convicted of wire fraud and has been the subject of crypto ATM investigations in Montenegro. He’s often spotted with Farage and is reportedly described as an “unpaid volunteer.”
He also has a prior history of co-directing Brexit funding for the far-right UK Independence Party.
Crypto political donations scrutinized
The anti-corruption charity, Spotlight on Corruption (SP), submitted recommendations for the Election Bill that suggested crypto political donations should be scrapped due to the risks of hostile foreign political interference and unverifiable overseas voters.
SP claims that crowdfunding crypto donations and donations submitted by third parties run the risk of an intermediary donor accepting large swathes of unpermissioned crypto donations.
It also suggests limits on donations made with privacy-focused cryptocurrencies and a requirement to only use FCA-approved firms to facilitate these crypto donations.
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According to the charity, Reform UK currently uses the crypto infrastructure firm Radom for its donations. It claims the company is not registered under the FCA and instead holds a virtual asset service provider license under Europe’s MICA regulations.
It noted that Radom is proud of its ability to allow overseas Reform UK supporters to make donations “with far less friction than international fiat transfers.”
While speaking about the potential ban, SP’s executive director claimed, “We know that bad actors like Russia use crypto to undermine and interfere in democracies globally, while the difficulties involved in tracing the true source of transactions means that British voters may not know everyone who’s funding the parties they vote for.”