Labour MP Calls for Crypto Donation Ban Amid Reform UK Surge

Labour MP Pat McFadden has called for a ban on crypto political donations in the UK, citing concerns over illicit or foreign money funding political campaigns. This proposal comes just two months after Reform UK announced it would accept crypto donations, becoming the first political party in the nation to do so. McFadden, a close ally of UK Prime Minister Keir Starmer, argued that banning crypto donations is essential to root out "dark money, hidden money, and foreign money" in politics. He also suggested banning donations from unincorporated associations and those financed by foreign profits.

Ian Taylor, a board advisor for digital asset advocacy group Crypto UK, criticized McFadden's stance, labeling it as a political move aimed at curbing Reform UK's growing popularity. Taylor argued that crypto donations can be easily traced and regulated through know-your-customer (KYC) processes, which require donors to identify themselves. He also highlighted that Reform UK already implements KYC checks for donors exceeding £500 and uses tools like Chainalysis, Elliptic, and Crystal Intelligence to monitor for illegal or sanctioned entities.

Reform UK has been characterized as a divisive far-right party, known for its strict anti-immigration and anti-transgender policies. Its leader, Nigel Farage, is also controversial due to his role in Brexit and remarks condemned as racist. Despite garnering only 14.3% of votes in the last election, translating to just four seats in the House of Commons, the party has since surged in popularity. The latest YouGov MRP poll suggests that Reform UK would be the nation’s largest party if an election were held today.

McFadden's comments come at a time when Labour's popularity has declined following the election. The party has faced criticism for cuts on winter fuel payments, contradictions on campaign pledges, and its stance on Israel’s attack on Gaza. A Reform UK spokesperson criticized McFadden's remarks, stating that they reflect Labour's outdated and out-of-touch attitude towards crypto. The spokesperson also noted that despite holding all the levers of power, Labour has done nothing to advance sensible, pro-innovation policy on digital assets, risking Britain falling behind in this area.