UK lawmakers are pushing to permanently ban cryptocurrency donations to political parties after Reform UK leader Nigel Farage resigned as MP for Clacton over a $6.7 million undeclared gift from a crypto billionaire, triggering a by-election that major parties have refused to contest.
UK Labour MPs are pushing to make the government's moratorium on cryptocurrency political donations permanent, four months after it took effect, as the Nigel Farage funding scandal intensifies scrutiny of digital asset money in British politics.
"The amendments to the representation of the people bill which my colleagues and I have tabled are vital safeguards against the wider threat that's seen $268 million come flooding in to build a whole media political complex behind populists in Britain," Liam Byrne, Labour chair of the business select committee spearheading the push, said in a statement. "We simply cannot afford to let our crumbling defenses be undermined any further."
Byrne's amendment would replace the current moratorium — imposed in March after the government-commissioned Rycroft Review warned that anonymous digital-asset transfers could channel foreign money into UK politics — with a permanent statutory ban. The measure is one of four amendments to the Representation of the People Bill that Labour MPs plan to introduce when the legislation returns to the Commons on July 14. Former cabinet minister Anneliese Dodds has tabled a separate amendment cutting campaign spending limits by nearly a third, from 34 million pounds to 24.4 million pounds, arguing the UK faces "an arms race in funding political campaigns."
The push comes after Farage on July 7 resigned as MP for Clacton, triggering a by-election, as the Parliamentary Commissioner for Standards investigated his acceptance of a 5-million-pound ($6.7 million) gift from Thailand-based crypto billionaire Christopher Harborne — a donation bankers reported to the National Crime Agency as potentially laundered money, the Guardian reported. Farage also faced separate allegations that he received undeclared staffing and security from George Cottrell, a convicted fraudster who served eight months in a US prison for offering to launder money for undercover agents. Farage has denied wrongdoing, calling the by-election a "people vs the establishment" contest, while Labour, the Conservatives, the Liberal Democrats and the Greens have all said they will not field candidates.
The Rycroft Review recommended a temporary "interlude" rather than a permanent ban, to let regulation catch up with digital asset technology. Campaigners have pressed for a full prohibition for months, pointing to outright bans already in place in Ireland and Brazil and arguing the Electoral Commission lacks the tools to trace crypto transactions. Reform UK became the first major British party to accept crypto donations in June 2025.
The parliamentary showdown coincides with a Labour leadership contest that is expected to elevate Andy Burnham — the former Greater Manchester mayor who advocated for the city to become a "Web3 powerhouse" — to prime minister after Keir Starmer's resignation. Burnham, who recently won a by-election to become MP for Makerfield, could shape the Financial Conduct Authority's oversight of the crypto industry if he secures enough Labour MP nominations to win the leadership bid.
The government has separately promised to toughen the elections bill with amendments including a 100,000-pound cap on donations from expats for their first year back in the UK. A spokesperson for the housing ministry said the government would "keep looking for ways to strengthen the bill" as it moves through Parliament.
This article is for informational purposes only and does not constitute investment advice.
