Labour will take 'immediate steps' to temporarily ban cryptocurrency donations to political parties as part of a wider crack down on foreign interference in UK elections.
In a move designed to kneecap Reform, ministers today placed a ‘moratorium’ on crypto donations for the foreseeable future.
Nigel Farage last year received what was believed to be the largest political donation by a living person when Christopher Harborne, a British-born crypto tycoon based in Thailand, donated £9 million to Reform.
Mr Farage has also personally invested £215,000 in a bitcoin scheme run by Kwasi Kwarteng, the former Tory chancellor who recently defected to his party.
Speaking after Prime Minister's Questions, Housing Secretary Steve Reed said the moratorium would be imposed until there is 'sufficient regulation in place to ensure full confidence and transparency in donations being made this way'.
Mr Reed added the ban would be applied retrospectively to any crypto donations received from today.
This follows today’s publication of the Rycroft review into foreign interference in British politics, written by former senior civil servant Philip Rycroft.
Labour ordered Mr Rycroft to conduct his review after the conviction of former Reform MEP Nathan Gill for accepting bribes to promote pro-Russian narratives.
Speaking in a briefing this morning, Mr Rycroft denied he was commissioned to ‘look after the interests of any particular party’ and said there is a ‘whole body of expert opinion’ worried about cryptocurrency donations.
He added that if trust in democracy erodes 'the consequences could be very severe' and 'extraordinarily damaging'.
While the former mandarin approached Reform UK to consult on the review, he did not speak to any MPs.
He revealed that MPs from other parties had approached him 'proactively' to feed into his work.
Responding in the Chamber today, Mr Farage retaliating by pointing out Keir Starmer's record on tackling small boats.
While Labour pledged to 'smash the gangs', more migrants have come to the UK under Sir Keir than any other PM.
Other than the ban on crypto donations, Mr Rycroft called for an annual cap on political donations from British voters living abroad, and said that no donor should be able to donate more than their post-tax profits in any given year.
The Rycroft review also called on Labour to endow the Electoral Commission – which regulates UK electoral affairs – with additional powers.
This would mean the Commission would be able to ‘mandate’ that political parties submit annual reports and accounts and spending returns.
It would also be able to share information with other external agencies more freely, and require information to be shared in return from such bodies.
The former civil servant also called for the creation of a ‘centre of police excellence’ to pursue investigations of complex criminal offences under electoral law.
The burden of proof would be reduced for criminal offences under the reforms to show the offender may have ‘reasonable cause to suspect’ they were committing a crime using existing legislation.
Speaking in today’s briefing, Mr Rycroft said the UK lacks a ‘coherent and robust strategy’ to deal with foreign interference.
And in a veiled attack on Labour, his review said dealing with hostile states should be a ‘much higher priority for Government’ and that there should be ‘clear accountability’ for ministers.
The review called for all foreign-funded adverts to be banned outright, and for the Lobbying Act to be amended to remove VAT exemption for all foreign based entities.
While the report referenced dangers posed by Russia, China and Iran – it also said a ‘new threat’ was emerging from the UK’s long-term partner the United States and allies like it.
The review noted ‘an emerging willingness of foreign actors and private citizens, including from allies like the United States to interfere in and influence politics abroad in pursuit of their own agenda’.
Reacting to the report, Dr Jess Garland, Director of Policy and Research for the Electoral Reform Society, said the government ‘must go further’ and also bring in a cap on how much all donors can give to a party, not just those based abroad.
She said: ‘Trust in politics is at a record low. To rebuild it, the rules around money in politics need to ensure that politicians are always focused on the needs of voters, not donors.’