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

Nasdaq files to list 21Shares Dogecoin ETF

Published

2 hours ago

April 29, 2025

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Nasdaq files to list 21Shares Dogecoin ETF

The United States exchange Nasdaq has asked regulators for permission to list a 21Shares exchange-traded fund (ETF) holding the popular memcoin Dogecoin, regulatory filings show.

The move follows 21Shares’ April 10 filing of its initial proposal to launch its Dogecoin ETF, shortly after similar applications from rivals Bitwise and Grayscale. The asset manager has also sought regulators’ permission to list ETFs holding other cryptocurrencies, including Solana (SOL), XRP (XRP), and Polkadot (DOT).

Nasdaq must gain approval from the Securities and Exchange Commission (SEC) before it can list and trade the fund. The request amounts to a regulatory review process that could determine whether Dogecoin becomes accessible to a broader range of investors through an ETF structure.

Onslaught of altcoin ETFs

Fund issuers requested to list dozens of altcoin ETFs after US President Donald Trump instructed the SEC to take a friendlier stance toward cryptocurrencies after his second term began in January.

As of April 21, more than 70 crypto ETFs were awaiting the SEC’s review. The list includes alternative layer-1 (L1) native tokens, such as SOL and Sui (SUI), as well as memecoins such as Bonk (BONK) and Official Trump (TRUMP).

While exchanges such as Nasdaq seek to list more crypto ETFs, they are also pushing for firmer US regulatory oversight of digital assets. In an April 25 comment letter, Nasdaq urged the SEC to hold digital assets to the same regulatory standards as securities if they constitute “stocks by any other name.”

Dogecoin utility

Dogecoin (DOGE) is a popular memecoin with a market capitalization of nearly $26 billion as of April 29, according to CoinGecko.

It is distinct from most other memecoins because DOGE is the native token of the Dogecoin network.

The proof-of-work blockchain network is designed as a faster, cheaper alternative to Bitcoin (BTC) for peer-to-peer payments.

It processed more than 40,000 transactions in the past 24 hours, according to data from Bitinfocharts.com.

In September 2024, blockchain developers QED Protocol and Nexus tipped plans to launch a layer-2 (L2) scaling solution designed to bring smart contracts to Dogecoin.

Magazine: Altcoin season to hit in Q2? Mantra’s plan to win trust: Hodler’s Digest, April 13 – 19

Politics

UK gov’t proposes crypto rules in response to scams

Published

5 hours ago

April 29, 2025

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<div>UK gov't proposes crypto rules in response to scams</div>

The United Kingdom’s Treasury and Chancellor of the Exchequer, Rachel Reeves, have proposed new crypto rules aimed at “support[ing] innovation while cracking down on fraudsters.”

In an April 29 notice, the UK government announced draft rules for cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), that would bring “crypto exchanges, dealers and agents” in line with regulations, as many residents were “exposed to risky firms and scams.” It cited discussions with US government officials, including a proposed US-UK cross-border sandbox from the Securities and Exchange Commission’s Hester Peirce.

“Today’s announcement sends a clear signal: Britain is open for business — but closed to fraud, abuse, and instability,” said the notice. “The government will bring forward final cryptoasset legislation at the earliest opportunity, following engagement on the draft provisions with industry.”

Treasury and Reeves said the UK was committed to making the country a “global hub for digital asset technologies,” referencing the goals of the previous government under the Conservative Party. A 2023 consultation paper from Treasury proposed “bringing a wide range of cryptoasset activities” — including trading and issuing stablecoins — in line with UK regulations.

Praise from industry

In a statement shared with Cointelegraph, Ian Silvera, the associate director for the self-regulatory trade association CryptoUK, called the government announcement a “very much welcomed and a big victory” for crypto firms. However, he added that the industry could also benefit from regulatory clarity on liquid staking and DeFi.

“Though there has been good regulatory progress from the [Financial Conduct Authority], which published its crypto roadmap late last year, the UK government first committed to becoming a global crypto hub in 2022,” said Silvera. “Progress has been slow since then, but as the Chancellor has recognised herself the mainstreaming of the industry has continued, with now 12% of all UK adults owning some sort of crypto, up from 4% in 2021.”

The FCA plans to publish final rules on crypto sometime in 2026, setting the groundwork for the UK regulatory regime to go live. The roadmap to greater regulatory clarity in the UK could follow the European Union, which started to implement its Markets in Crypto-Assets (MiCA) framework in December.

Magazine: Financial nihilism in crypto is over — It’s time to dream big again

Politics

$649B stablecoin transfers linked to illicit activity in 2024: Report

Published

5 hours ago

April 29, 2025

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9B stablecoin transfers linked to illicit activity in 2024: Report

Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2024, according to an April 29 report.

Bitrace defines high-risk blockchain addresses as those used by illegal entities to receive, transfer or store stablecoins.

Crypto compliance firms typically score crypto wallet addresses based on their likelihood of involvement in illicit activities. The higher the risk, the higher the likelihood of foul play, and the less likely compliant crypto businesses are to accept the assets.

Per the report, the amount accounted for roughly 5.14% of all stablecoin transaction volume in 2024. This is down 0.8% from 5.94% the previous year, but significantly higher than the 2.8% reported in 2022 and 1.63% in 2021.

$649B stablecoin transfers linked to illicit activity in 2024: Report — *Proportion of high-risk stablecoin transactions. Source:* *Bitrace*

Tron USDT tops high-risk transactions

Tron-based USDt (USDT) dominates high-risk stablecoin transactions, with Bitrace data indicating that well over 70% of the volume moved on the network. The remaining high-risk stablecoin transactions are mostly Ethereum-based USDt and a small amount of USDC (USDC).

A likely explanation for the prevalence of USDT is likely due to its larger market capitalization and adoption compared with other stablecoins. At the time of writing, CoinMarketCap shows that USDt has a market cap of over $148 billion, while USDC stands at over $62 billion.

Tron’s prevalence is not as easy to explain. Ethereum remains the more popular choice for most stablecoin users, with DefiLlama showing nearly $124.3 billion worth of stablecoins circulating on the network. Tron ranks second, with about $71 billion — almost 43% less than Ethereum.

When comparing USDT balances alone, Tron holds slightly more than Ethereum: 47.4% of USDT supply, versus Ethereum’s 45.44%.

Crypto gambling continues its rise

Bitrace also reported that in 2024, online gambling platforms processed $217.8 billion worth of stablecoins — a 17.5% increase over the previous year.

Once again, USDT also dominated this type of activity. Still, USDC’s market share is rapidly rising, clocking in at 13.36% in 2024.

The data follows recent reports that crypto casinos generated more than $81 billion in revenue in 2024, even as regulators in key jurisdictions continued to block access to the platforms, according to a new report.

Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express