UK Security Committee Calls Crypto Donations an ‘Unacceptably High’ Risk and Urges Immediate Moratorium
The Joint Committee on the National Security Strategy, or JCNSS, the cross-party parliamentary body that scrutinises the UK’s national security framework, published a 47-page report this week urging the government to impose an immediate moratorium on cryptocurrency political donations.
Chaired by Labour MP Matt Western, the committee wrote to Housing Secretary Steve Reed recommending the Representation of the People Bill be amended to block crypto donations until the Electoral Commission can produce binding statutory guidance.
“At present, the opportunity to evade rules is too high, the adequacy of mitigations too low, and the resource cost of attempting to implement acceptable oversight is disproportionate,” the report stated. “We see no democratic imperative to permit the use of crypto in political finance until adequate safeguards are in place.”
The committee’s concerns centred on features that distinguish crypto from conventional transfers: mixer and tumbler accounts that pool and redistribute funds to sever the link between sender and recipient; privacy coins; swap services; and chain-hopping, which moves funds across multiple blockchain networks to obscure origin.
It also flagged AI-enabled micro-donations, automated tools that could fragment a large transfer into sub-£500 contributions, each below the disclosure threshold, letting a large undisclosed donation arrive in pieces too small to trigger scrutiny. UK political donations totalled nearly £65 million in 2025, per Electoral Commission data.
Industry Pushes Back
Industry witnesses pushed back. Ian Taylor, board adviser at CryptoUK, acknowledged automated micro-donations were “feasible” but said actual risk depended on the robustness of any new rules.
Natasha Powell, chief compliance officer at Kraken, argued that blockchain tracing tools can already identify wallets distributing funds to multiple recipients, describing the capability as “achievable and deployable” and “not NASA.” Taylor called a full ban “undemocratic”; Powell warned it could push donation activity offshore, making it harder, not easier, to monitor.
Ban vs Moratorium
The committee examined two approaches. The UK Anti-Corruption Coalition argued for an outright ban, citing Ireland, Brazil, and several US states as precedents. Tom Keatinge, director of the Centre for Finance and Security at the Royal United Services Institute, cautioned that donors could simply convert crypto to sterling before donating through traditional banking channels, evading any crypto-specific prohibition, and backed a moratorium instead.
The committee followed his recommendation. Alongside the temporary block, the report calls for a centralised political finance unit within the National Crime Agency, stricter source-of-wealth checks, a lower disclosure threshold, and prison sentences of up to three years for serious violations.
The government has not committed to including the moratorium in the bill. Ministers are waiting for Philip Rycroft’s independent review into foreign financial interference, which covers cryptocurrency specifically, before tabling amendments.
That review is due by the end of March. The Electoral Commission, which lacks binding authority over crypto donations, has called the situation a transparency gap and is seeking enforceable powers.
Whether the moratorium makes it into the bill will depend on how quickly the government acts on Rycroft’s findings, and whether pressure from seven parliamentary committee chairs, two anti-corruption coalitions, and now the JCNSS is enough to force the issue before the bill’s next Commons debate.
