UK Labour’s crypto political donations ban sparks backlash

UK Labour has proposed banning crypto political donations from digital-asset firms and individuals whose income primarily derives from cryptocurrencies, citing risks of money laundering and foreign interference. This move, backed by Cabinet Office Minister Pat McFadden, aligns with broader UK crypto reforms—such as the OECD’s Cryptoasset Reporting Framework from January 2026 and the FCA’s plan to bar retail investors from buying crypto with credit. Crypto UK, representing over 120 firms with $20 bn in assets, called the ban an attack on civil liberties that would stifle innovation. The group argues that crypto political donations are inherently transparent—recorded on public blockchains and monitored by the UK Electoral Commission—and urges balanced regulation to protect financial integrity and maintain the UK’s status as a global crypto hub. Critics caution that a blanket ban could alienate investors and weaken market growth. Traders should note the policy divergence as the US continues to accept crypto donations, underlining potential implications for global capital flows and market sentiment.