Labour member of parliament Pat McFadden said the UK should consider banning crypto political donations, citing concerns of illicit or foreign money funding campaigns. The call comes two months after Nigel Farage announced that his Reform UK party would become the first British party to accept donations in crypto.
Ian Taylor, board advisor for digital asset advocacy group Crypto UK, told Decrypt that McFadden’s comments were “absolutely” a political move made to stunt Reform UK’s growing popularity.
“If we want to clean up politics, we must root out the dark money, hidden money, and foreign money,” McFadden, who is the Cabinet Office minister and close ally of UK Prime Minister Keir Starmer, told MPs on Monday. “That means banning cryptocurrency donations, donations from unincorporated associations, and donations financed by foreign profits.”
Taylor pushed back on McFadden’s assumption that crypto donations would open the door to “dark,” “hidden,” or “foreign” money because donations could simply require the sender to identify themselves.
“If political parties wanted to accept crypto, they would say, well, you need to KYC yourself, and that is pretty easily done,” he explained, referring to the know-your-customer process financial institutions use to collect personal identification from clients.
A Reform UK spokesperson told Decrypt that it currently requires donors of over £500 to pass KYC checks by Sumsub and that it also monitors behavior for ties to illegal or sanctioned entities using tools like Chainalysis, Elliptic, and Crystal Intelligence. Reform UK said it will refund any payment that falls outside Electoral Commission guidelines.
“It’s on a public chain, and we have tools to be able to identify the sender and the history of the particular crypto asset,” Taylor from Crypto UK explained. “We have really good ways to be able to stop, track, trace, and even get back stolen assets being used in crypto.”
That said, there have been concerns over foreign influence via crypto across the Atlantic. U.S. politicians demanded an ethics investigation into President Trump’s meme coin, after he invited its top holders to a private dinner earlier this year. The lawmakers’ letter cited risks of foreign payments through anonymous crypto investments to gain influence.
But the pace of embrace in the UK has been slower. There’s no MP with an official meme coin and only one party accepts crypto donations.
“It seems like he’s trying to make a stance on an issue that doesn’t exist,” Taylor said of McFadden’s comments. “To my point, where are the numbers? How much actual crypto has been donated to any party? I would argue zero.”
Reform UK became the first political party in Britain to accept any form of cryptocurrency as payment in late May. As a result, Taylor believes McFadden’s call to ban crypto donations is “absolutely” a political move.
“Whether you like Reform—you like their strategy, you think they could run the government—they’re gaining popularity,” Taylor told Decrypt. “That would cause the incumbent government to look for ways to attack them, to discredit them. That’s the job of the parties to discredit the other side. That’s part of the game, right?”
Pat McFadden declined Decrypt’s request for comment.
Reform UK has been characterized as a divisive far-right party, running on strict anti-immigration and anti-transgender policies. Its leader, Farage, is just as controversial. That’s due to his part in Brexit and a number of his remarks being condemned as “racist”—such as his defence of a racial slur.
In the last election, the party garnered 14.3% of votes, which translated into just four of the 650 seats in the House of Commons. Although, since then, the party has surged in popularity, with the latest YouGov MRP poll showing that Reform UK would be the nation’s largest party if an election were held.
McFadden’s comment arrived as Labour’s popularity has plummeted following the election, due to the party’s cuts on winter fuel payments, contradictions on campaign pledges, and stance on Israel’s attack on Gaza.
“Pat McFadden’s comments are emblematic of Labour’s outdated and out-of-touch attitude towards crypto,” a Reform UK spokesperson told Decrypt. “Despite holding all the levers of power, they’ve done nothing to advance sensible, pro-innovation policy on digital assets, which risks leaving Britain behind.”
