Labour wants crypto donations banned permanently after Reform UK received $2.5 million in anonymous contributions. A vote is expected before summer recess.
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Labour lawmakers proposed a full moratorium on crypto donations in March. Some now want that ban made permanent after millions of dollars in contributions were linked to Reform leader Nigel Farage.
The proposal would block political parties from accepting Bitcoin, Ether, or any digital asset as a campaign contribution. The move follows a scandal in which Farage's Reform UK party received roughly $2.5 million in crypto donations, much of it from anonymous wallets. Critics said the donations skirted transparency rules that apply to cash and bank transfers.
Labour's plan would require the Electoral Commission to treat crypto donations the same as foreign contributions, which are already illegal. The party's digital assets task force argued that the current framework leaves a loophole: crypto can be sent from overseas addresses without triggering the same checks as a wire transfer from a foreign bank.
Farage has defended the donations, calling them "perfectly legal" and accusing Labour of using the issue to distract from its own fundraising troubles. The Electoral Commission has flagged at least three donations that lacked the required donor identification. The National Crime Agency is reviewing whether any of the funds originated from sanctioned entities.
The proposed moratorium would last 12 months, giving the commission time to draft new rules for digital asset contributions. Labour's Treasury spokesperson said the party would push for a permanent ban if the review found that crypto donations "cannot be reliably traced to a lawful source."
A vote on the measure is expected before the summer recess. The bill would need cross-party support to pass, and the Conservatives have not yet taken a position. Some Tory MPs have privately expressed concern that a permanent ban would cut off a growing source of small-dollar donations from younger voters.
The Electoral Commission has advised all parties to reject crypto donations voluntarily until the rules are settled. At least three major parties have complied. Reform has not.
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