Sir Keir Starmer has announced a temporary ban on cryptocurrency donations to political parties following a government review into electoral interference – a move that will be a major blow to Nigel Farage’s Reform UK.
The government will also cap donations from British citizens living abroad who are still on the electoral register.
Sir Keir told MPs the review by Philip Rycroft, a former senior civil servant, set out the “stark threats posed by illicit finance” – and he hit out at Mr Farage, whose party has accepted a number of crypto donations.
In the last year, Reform received about £12m from the Thai-based British investor Christopher Harborne, as well as a series of smaller donations from overseas.
The review warned that Iran, Russia and China are trying to “cause harm” to Britain’s democracy, that foreign interference is “real and persistent” and the government needs to make it a “far higher” priority.
Sir Keir told MPs at PMQs that the government would “act decisively to protect our democracy; that will include a moratorium on all political donations made through cryptocurrencies.”
The announcement led to calls for Mr Farage to return crypto donations.
Lib Dem cabinet spokesperson Lisa Smart said: “Reform taking untraceable, secretive crypto-donations to fund their Trump-style politics here in the UK should never have been allowed. Farage must return all the crypto donations he’s received from anonymous overseas sources or admit he’s happy to let foreign sources of money poison our politics in the UK.”
The report was ordered after Reform UK’s former leader in Wales, Nathan Gill, was jailed for taking bribes to make pro-Russia statements while a member of the European Parliament.
The report also calls for a ban on foreign-funded online political ads, suggested MPs’ trips overseas should be funded only by the government or parliament, and warned of a "potential new threat" from the US.
In a sign of the scale of the problem, the report’s authors warned that social media posts on Scottish independence fell dramatically when the Iranian authorities recently cut off internet service to its citizens.
Mr Farage was forced to defend the donation from Mr Harborne last year, insisting he “wants nothing from me”.
But the donation prompted concerns about political funding, as Mr Farage publicly promoted Tether, the cryptocurrency company in which Mr Harborne is a shareholder, shortly after receiving the donation.
Few parties accept crypto donations, but Reform UK is the most prominent to do so.
Mr Rycroft said he had spoken to Mr Farage’s party while compiling his report.
Asked about the prospect of Reform feeling targeted by the recommendations, he said: “I wasn’t here to look out for the interests of any political party, I was here to look out for the interest of our democratic processes.”
Attempts to use financial influence to infiltrate politics by gaining leverage and sowing division and distrust are not new but “arguably more acute”, Mr Rycroft noted.
He said he was “not pressing the panic button” but “ringing the alarm bell” on the issue and urged the government to “act swiftly” on his recommendations.
Reform UK has also secured a second multimillion-pound donation from Mr Harborne. Months after he gave the party £9m, he gave an additional £3m donation in November, according to the Electoral Commission.
Reform home affairs spokesperson Zia Yusuf described the announcement as “a dark day for Britain”.
He said: “Reform receives a large, perfectly lawful donation from a British citizen, and Labour responds by rushing through a new law to prohibit him from making such a donation again.
“Rycroft even refers to British citizens as ‘malign actors’ in his report. This is how fast the machinery of government moves when it wants to protect itself.”
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