What are the rules around political donations, do they change for an election and can parties give back money?

Published

1 year ago

March 14, 2024

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It’s an election year – and that means political donations have ramped up.

And this has been compounded by the alleged comments of Frank Hester, who is reported to have said Labour MP Diane Abbott made him “want to hate all black women”, after giving £10m to the Conservatives.

But what exactly are the rules on donations? Do they change for elections? Who gets the most money? Why do people donate? And can parties give funds back?

Here we explain:

What are the rules on donations?

Politics and money is a rabbit hole that Lewis Carroll would be jealous of, and the UK’s system is no different.

One of the most important things to note is that the figures are on a much smaller scale to those in the US – in the tens of millions rather than billions.

One key distinction is that donations to MPs are different to political party donations.

MPs have to declare all their interests on a public register, which can be easily searched using the Sky News Westminster Accounts tool.

This is how we know that Frank Hester’s The Phoenix Partnership donated a £15,900 helicopter flight to Rishi Sunak late last year.

His company gave £5m, and he gave £5m personally to the Conservative Party itself.

The rules for these donations require all contributions over £11,180 to be declared. This was recently increased from a threshold of £7,500.

Money donated to political parties in this fashion goes into their accounts but, according to Professor Justin Fisher, an expert in political finance at Brunel University, it does not need to be “ring-fenced”.

This is why there is no way to see what the money donated by Mr Hester and his company was spent on.

The body responsible for regulating and setting standards for donations and party finances is the Electoral Commission.

Are there different rules for elections?

In short – yes, many different restrictions.

The aforementioned increase in the floor for the declaration of donations was done as part of measures to update financial restrictions that had laid untouched for two decades.

The spending limit for parties during elections also increased. For a party contesting all 650 UK seats it went from around £18m to just over £35m.

However, as no party contests every seat, the effective limit is just over £34m.

According to the Electoral Commission, this applies to spending on certain activities in the 365 days before the election.

Confusingly, it is impossible to know the start date of this period, as the government can call an election whenever it wants, so in November 2023 the Electoral Commission encouraged parties to “behave as if you are in a regulated period from now onwards”.

Other changes included how often parties have to report their donations.

In normal times, figures are published quarterly. After an election is called and parliament is dissolved, publication takes place every week.

There are also restrictions on how much money a prospective MP can spend in an election period.

Each constituency has a limit based on the number of people who live there.

And those hoping to get elected have to declare all their spending, as well as any donation the candidate received over £50.

Who gives the most money – and why?

The biggest donors to political parties can be easily identified through the Sky News Westminster Accounts interface.

It is dominated by individuals, unions, and just a few companies.

At the top of the list sits Lord David Sainsbury, the supermarket heir, who has given more than £13m in donations since the last election – including £5.1m to Labour and £8m to the Liberal Democrats.

He is not to be confused with his cousin, the late Lord John Sainsbury, who gave £10.2m to the Conservatives in the same period.

Next up is the union Unite, which has given £10.7m to Labour, and hundreds of thousands of pounds to Labour MPs.

The GMB union and Unison have both given around £6m to Labour since 2019.

Businessman Graham Edwards gave £5.2m to the Conservatives in this period.

Next on the list is Mr Hester’s The Phoenix Partnership, which has given £5.2m, including the helicopter flight to Mr Sunak.

Mr Hester also donated £5m in a personal capacity to the Conservatives.

Prof Fisher explained that it used to be more common for companies to donate, instead of individuals – but it is harder to justify this now in an era when spending plans have to get past powerful boards.

Instead, companies can benefit from different, less expensive (on a balance sheet) endeavours, like lobbying or hosting events.

Donors tend to hand over cash or gifts because they want to see a party win which will improve their position, or because of a prior affiliation. Or an individual could just be politically aligned with the party in question.

Can parties return money?

Once again, the short answer is yes.

There have been calls for the Conservatives to return the money given to them by Mr Hester or his company.

Political parties can spend their money how they choose – and this could include giving it back or donating it to charity.

It is not the first time there have been calls for money to be returned.

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The Liberal Democrats faced calls to return money donated to them by Michael Brown, who lived in Majorca but gave money through a company based in the UK – something the rules do not allow.

The Electoral Commission investigated but did not take further action. Mr Brown was later convicted of fraud.

The Labour Party faced calls in 2002 to return a donation from publisher Richard Desmond because his publication “titles are demeaning and degrading to women”.

One time when money did get returned was when Labour accepted a £1m donation from Formula 1 chief Bernie Ecclestone shortly before they came to power in 1997.

At the time, the donation was not made public as there was no requirement to do so. Labour did, however, have a policy at the time of declaring donations.

After coming to power, Labour announced it would ban all sports sponsorships from tobacco companies.

But, following talks with Mr Ecclestone, the government proposed exempting Formula 1 from the ban.

The donation then became public, and a political scandal erupted, so the party committed to give the money back.

In March 1998, Mr Ecclestone cashed a cheque which Labour had written to him for the £1m.

This shows money can be returned, if there is a will to do so.

Politics

Trump tariffs squeeze already struggling Bitcoin miners — Braiins exec

Published

2 hours ago

April 4, 2025

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Trump tariffs squeeze already struggling Bitcoin miners — Braiins exec

The new trade tariffs announced by US President Donald Trump may place added pressure on the Bitcoin mining ecosystem both domestically and globally, according to one industry executive.

While the US is home to Bitcoin (BTC) mining manufacturing firms such as Auradine, it’s still “not possible to make the whole supply chain, including materials, US-based,” Kristian Csepcsar, chief marketing officer at BTC mining tech provider Braiins, told Cointelegraph.

On April 2, Trump announced sweeping tariffs, imposing a 10% tariff on all countries that export to the US and introducing “reciprocal” levies targeting America’s key trading partners.

Community members have debated the potential effects of the tariffs on Bitcoin, with some saying their impact has been overstated, while others see them as a significant threat.

Tariffs compound existing mining challenges

Csepcsar said the mining industry is already experiencing tough times, pointing to key indicators like the BTC hashprice.

Hashprice — a measure of a miner’s daily revenue per unit of hash power spent to mine BTC blocks — has been on the decline since 2022 and dropped to all-time lows of $50 for the first time in 2024.

According to data from Bitbo, the BTC hashprice was still hovering around all-time low levels of $53 on March 30.

“Hashprice is the key metric miners follow to understand their bottom line. It is how many dollars one terahash makes a day. A key profitability metric, and it is at all-time lows, ever,” Csepcsar said.

He added that mining equipment tariffs were already increasing under the Biden administration in 2024, and cited comments from Summer Meng, general manager at Chinese crypto mining supplier Bitmars.

“But they keep getting stricter under Trump,” Csepcsar added, referring to companies such as the China-based Bitmain — the world’s largest ASIC manufacturer — which is subject to the new tariffs.

Trump’s latest measures include a 34% additional tariff on top of an existing 20% levy for Chinese mining imports. In response, China reportedly imposed its own retaliatory tariffs on April 4.

BTC mining firms to “lose in the short term”

Csepcsar also noted that cutting-edge chips for crypto mining are currently massively produced in countries like Taiwan and South Korea, which were hit by new 32% and 25% tariffs, respectively.

“It will take a decade for the US to catch up with cutting-edge chip manufacturing. So again, companies, including American ones, lose in the short term,” he said.

Csepcsar also observed that some countries in the Commonwealth of Independent States region, including Russia and Kazakhstan, have been beefing up mining efforts and could potentially overtake the US in hashrate dominance.

“If we continue to see trade war, these regions with low tariffs and more favorable mining conditions can see a major boom,” Csepcsar warned.

As the newly announced tariffs potentially hurt Bitcoin mining both globally and in the US, it may become more difficult for Trump to keep his promise of making the US the global mining leader.

Trump’s stance on crypto has shifted multiple times over the years. As his administration embraces a more pro-crypto agenda, it remains to be seen how the latest economic policies will impact his long-term strategy for digital assets.

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Politics

Malta regulator fines OKX crypto exchange $1.2M for past AML breaches

Published

2 hours ago

April 4, 2025

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Malta regulator fines OKX crypto exchange .2M for past AML breaches

Cryptocurrency exchange OKX is under renewed regulatory scrutiny in Europe after Maltese authorities issued a major fine for violations of Anti-Money Laundering (AML) laws.

Malta’s Financial Intelligence Analysis Unit (FIAU) fined Okcoin Europe — OKX’s Europe-based subsidiary — 1.1 million euros ($1.2 million) after detecting multiple AML failures on the platform in the past, the authority announced on April 3.

While admitting that OKX has significantly improved its AML policies in the past 18 months, the authority “could not ignore” its past compliance failures from 2023, “some of which were deemed to be serious and systematic,” the FIAU notice said.

OKX was among the first crypto exchanges to receive a license under Europe’s new Markets in Crypto-Assets (MiCA) regulation via its Malta hub in January 2025.

The news of the $1.2 million penalty in Malta came after Bloomberg in March reported that European Union regulators were probing OKX for laundering $100 million in funds from the Bybit hack.

Bybit CEO Ben Zhou previously claimed that OKX’s Web3 proxy allowed hackers to launder about $100 million, or 40,233 Ether (ETH), from the $1.5 billion hack that occurred in February.

This is a developing story, and further information will be added as it becomes available.

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Politics

US court fines UAE crypto firm CLS Global $428K for wash trading

Published

3 hours ago

April 4, 2025

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US court fines UAE crypto firm CLS Global 8K for wash trading

Authorities in the US state of Massachusetts continue targeting unlawful cryptocurrency market practices, with a local court fining crypto financial services firm CLS Global.

A federal court in Boston on April 2 sentenced CLS Global on criminal charges related to fraudulent manipulation of crypto trading volume, according to an announcement from the Massachusetts US Attorney’s Office.

In addition to a $428,059 fine, the court prohibited CLS Global from offering services in the US for a probation period of three years.

CLS Global, a crypto market maker registered in the United Arab Emirates, in January pleaded guilty to one count of conspiracy to commit market manipulation and one count of wire fraud.

CLS agreed to manipulate the FBI’s “trap token” NexFundAI

The charges against CLS Global followed an undercover law enforcement operation involving NexFundAI, a token created by the FBI as part of a sting operation in May 2024.

CLS Global was among at least three firms that took the FBI’s bait and agreed to provide “market maker services” for NexFundAI, including a fraudulent scheme to attract investors to purchase the token.

In October 2024, the Securities and Exchange Commission announced fraud charges against CLS and its employee, Andrey Zhorzhes. The US securities regulator also filed complaints against two other NexFundAI manipulators, Hong Kong-linked ZM Quant Investment and Russia-linked Gotbit Consulting.

CLS Global’s profile

According to CLS Global CEO Filipp Veselov, the company was founded in 2017 to fill in a “huge gap in the market for high-quality market-making solutions and trading consulting.”

Prior to CLS, Veselov worked at the Russian cryptocurrency exchange platform Latoken, which is advertised as a “global digital asset exchange” and has about 370,000 followers on X.

The CLS team also includes chief revenue officer Pavel Singaevskii, who previously served as sales manager at Stex, a crypto platform that reportedly ceased operations without warning in 2023.

US court fines UAE crypto firm CLS Global $428K for wash trading — *Source:* *CLS Global*

According to CLS Global’s X page, the platform continues operating and has more than 110,000 followers at the time of publication.

How much wash trading is in crypto?

Wash trading is an illegal practice involving artificially inflating trading volume by repeatedly buying and selling the same asset, generating a misleading perception of demand.

According to a January 2025 report by the US blockchain analytics firm Chainalysis, the crypto market has at least $2.6 billion in estimated wash traded volumes, or just about 2% of total daily crypto trading volumes, as reported by CoinGecko.

Some studies indicate that wash trading makes up a bigger share of the crypto market.

In 2022, the US National Bureau of Economic Research reported that illegal wash trading may account for as much as 70% of average trading volumes on unregulated exchanges.

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