UK Lawmakers Push to Ban All Crypto Political Donations

Senior Labour lawmakers are demanding that Prime Minister Keir Starmer impose a complete ban on cryptocurrency donations to political parties. The push comes amid growing concerns about foreign state interference in British democracy.

Seven influential backbenchers, including former minister Liam Byrne, have signed an open letter to Downing Street. They warn that without decisive action, hostile actors could exploit digital assets to influence UK elections.

1/. Seven Select Committee Chairs have written to the PM urging a ban on cryptocurrency donations to political parties in the #ElectionsBill.

Crypto is opaque, hard to trace, vulnerable to foreign interference & a growing risk to democratic integrity.

We should make clear NOW… pic.twitter.com/9XOXllixtu

— Liam Byrne MP (@liambyrnemp) January 12, 2026

The intervention arrives as Parliament prepares to debate a new elections bill expected later this month. Lawmakers say the legislation represents a critical opportunity to close regulatory gaps around political funding.

Emily Thornberry, chair of the foreign affairs committee, joined the letter alongside Matt Western, who leads the joint committee on national security strategy. Other signatories include chairs of the defence, housing, science, and justice committees.

UK Foreign Interference Fears Drive Urgent Action

The letter outlines specific threats identified during parliamentary evidence sessions. These include risks from hostile foreign states, malign groups, and unregulated technological systems.

Committee members expressed particular concern about artificial intelligence capabilities. They warned AI could further obscure the true source of political donations.

Thornberry stated the foreign affairs committee has been studying threats to democracies worldwide. She described cryptocurrency as “the Russian slush fund of choice” in remarks accompanying the letter.

Byrne characterized the open letter as merely the starting point of a broader backbench campaign. He pledged to move amendments if the elections bill fails to include a crypto donation ban.

“Anonymous money has no place in British democracy,” Byrne said. He added that “scores of MPs” would support such amendments.

Currently, UK law permits parties and individuals to accept cryptocurrency donations. Standard permissibility checks apply, though only three registered political parties accept crypto.

Reform UK remains the most prominent party currently accepting cryptocurrency donations. The party has confirmed receiving at least one such contribution.

The government has not signaled that the elections bill will include an outright ban. However, officials say the matter remains under active consideration.

New Reporting Framework Joins Global Effort

Meanwhile, the UK has launched new cryptocurrency reporting requirements effective January 2026. Exchanges must now collect detailed user information, including transaction data and capital gains.

The reporting measures form part of the Cryptoasset Reporting Framework developed by the OECD. The UK joins 47 other countries implementing these transparency standards.

✍️ JUST IN: THE UK HAS OFFICIALLY APPROVED THE BEGINS OF A CRACK DOWN ON CRYPTO TAX EVASION. pic.twitter.com/rEMssuWJjK

— Coinwaft (@coinwaft) January 1, 2026

Under the new rules, exchanges operating in the UK must gather extensive transaction data. This includes buying prices, sales figures, and taxation details reported directly to HMRC.

Data collection begins immediately, though automated international information sharing launches in 2027. At that point, HMRC will exchange tax data on crypto holdings with other participating nations.

Byrne emphasized the urgency of addressing regulatory gaps before adversaries exploit them. “When technology makes foreign interference cheaper, faster and harder to trace, the answer isn’t an open door,” he said.

“We have to bolt the door shut,” Byrne added. The backbench coalition appears prepared to escalate pressure if the government does not act.

The coming weeks will reveal whether Starmer’s government includes crypto restrictions in the elections bill. Parliamentary debate on the legislation is expected to intensify as the month progresses.