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UK politician proposes ban on political crypto donations over foreign interference risks

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UK politician proposes ban on political crypto donations over foreign interference risks

Some Members of Parliament in the United Kingdom, led by the chairman of the Joint Committee on National Security Strategy, Matt Western, are pushing for a temporary ban on political crypto donations due to concerns over foreign interference.

Summary

  • UK MPs have proposed a temporary moratorium on crypto donations to political parties until the Electoral Commission issues statutory guidance.
  • The proposal calls for the use of FCA-registered platforms, mandatory source verification and a ban on mixer-linked funds among other provisions.

A letter directed to the Secretary of State for Housing, Communities and Local Government, Steve Reed, has proposed a temporary moratorium on cryptocurrency donations to political parties until the Electoral Commission produces statutory guidance.

In the letter, Western raised concerns around “foreign state intent to interfere in UK political finance” as there is “no clear national enforcement lead for political finance and foreign interference risk.”

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“As the security environment worsens and the UK’s military role in Europe grows, the value of influencing the UK’s political positions (for example, on Ukraine, or US/EU relations) is likely to increase,” Western said.

He has urged the Electoral Commission to introduce interim safeguards, such as only allowing political parties to process crypto donations through Virtual Asset Service Providers registered with the Financial Conduct Authority, and accepting contributions where there is high confidence in identifying the ultimate source of the funds.

He also suggests prohibiting the use of crypto mixers or tumblers that can be used to obscure the provenance of assets, alongside a mandate that political parties should convert donations into pound sterling within 48 hours of receipt.

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Further, Western recommended stricter source of wealth checks for donors and a review of sentencing for electoral finance offences, alongside higher penalties for breaches involving foreign money and expanded powers for regulators to pursue violations.

Last month, Western, along with a group of other committee chairs, lobbied for a full ban on cryptocurrency donations by including a provision in the Representation of the People Bill. That, however, was not included in the legislation when the bill was introduced to the House of Commons on Feb. 12.

According to a BBC report, Reform UK was the first party at Westminster to accept political cryptocurrency donations in the UK, led by pro-crypto figure Nigel Farage, who announced the move after appearing at the Bitcoin 2025 conference in Las Vegas.

However, details on the party’s official website state that it does not accept anonymous donations and applies permissibility checks to ensure funds originate from UK-registered companies or individuals listed on the electoral register, with contributions above £500 subject to standard compliance procedures.

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Across the globe, crypto donations became a defining feature of the U.S. election cycle last year, with several political figures, including current President Donald Trump, having embraced digital asset fundraising. Trump’s campaign began accepting cryptocurrency contributions during the 2024 race.

As previously reported by crypto.news, Representative Mike Collins from Georgia also announced plans to accept cryptocurrency donations last year.

The Federal Election Commission permits cryptocurrency contributions to political committees, provided they adhere to existing contribution limits, disclosure standards, and other reporting requirements.

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Crypto World

Bhutan has sold over $110m in Bitcoin as sovereign stack drops 65%

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El Salvador bets on $100m tokenized SME equity via Stakiny

Bhutan has sold over $110m in Bitcoin in 2026, cutting sovereign holdings by about 65% from their peak as Druk Holding shifts from mining-led accumulation to steady liquidation.

Summary

  • Druk Holding & Investments has offloaded more than $110m in BTC this year, including a 973 BTC transfer worth about $72.3m on March 17–18 routed partly through QCP Capital and Binance.
  • Bhutan’s stash has shrunk from roughly 13,000 BTC (over $1.4b and 40% of GDP at peak) to around 5,400 BTC worth about $374m, with no inflows over $100k in more than a year, implying mining has largely stopped.
  • The kingdom’s methodical $5–10m clip sales, built on hydropower-funded mining since 2019, now act as a recurring sovereign overhang for Bitcoin just as macro conditions and sentiment remain fragile.

The Kingdom of Bhutan has quietly become one of the most closely watched sovereign Bitcoin sellers of 2026, with its state investment arm offloading more than $110 million worth of BTC since the start of the year — a systematic drawdown that has cut its holdings by 65% from their peak and raised questions about the future of one of crypto’s most unlikely national success stories.

The latest and largest transaction occurred on March 17 and 18, when Druk Holding & Investments — the sovereign wealth fund that manages Bhutan’s digital asset reserves — transferred 973 BTC worth approximately $72.3 million across multiple addresses. Among the recipients was QCP Capital, a Singapore-based institutional trading firm, indicating structured OTC selling designed to minimize market impact rather than distressed dumping onto open exchanges. A portion was also directed toward Binance hot wallets.

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Bhutan’s Bitcoin journey began in 2019, when the country began quietly mining BTC using surplus hydroelectric power from its Himalayan rivers — a near-zero marginal cost energy source that made mining highly profitable even at modest price levels. At its peak, Bhutan held approximately 13,000 BTC, valued at over $1.4 billion — a sum representing more than 40% of the country’s entire gross domestic product at the time. Those holdings have since contracted to roughly 5,400 BTC, worth around $374 million at current prices.

A critical detail flagged by on-chain analytics firm Arkham Intelligence adds a new dimension to the story: Bhutan has not recorded a Bitcoin inflow of over $100,000 in more than a year. This strongly suggests the country has halted or severely curtailed its mining operations, shifting from an accumulation-and-hold strategy to a pure liquidation mode. The reasons remain officially unconfirmed, but analysts have pointed to declining mining profitability following the April 2024 halving, rising operational costs, and competing demands on the country’s hydropower infrastructure.

The selling pattern has been methodical rather than reactive. Bhutan typically transacts in $5–10 million clips, with occasional larger tranches when market conditions are favorable. The $72.3 million move this week is an outlier in size, suggesting either an acceleration of the drawdown timeline or an opportunistic decision to lock in prices near the $71,000 level before further deterioration.

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For the broader market, the sustained presence of sovereign-scale selling at these volumes is a non-trivial headwind. Unlike retail or even institutional fund selling, sovereign liquidations tend to be price-insensitive and recurring — features that can create persistent ceiling pressure on any attempted recovery. As Bitcoin navigates a fragile macro environment with fear sentiment elevated and ETF flows recently reversing, Bhutan’s quiet but relentless selling is one more structural force the bulls must absorb on the path back to new highs.

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Morgan Stanley Pushes Closer to Bitcoin ETF With Amended SEC Filing

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Morgan Stanley Pushes Closer to Bitcoin ETF With Amended SEC Filing

Morgan Stanley filed a second amended S-1 for its proposed spot Bitcoin exchange-traded fund (ETF), detailing seed capital, trading partners and listing plans as the Wall Street bank moves closer to launching the product under the ticker MSBT.

The amended filing says the trust expects to raise $1 million through the sale of 50,000 initial seed shares to its delegated sponsor ahead of listing on NYSE Arca, then use the proceeds to buy Bitcoin (BTC) for the fund. Morgan Stanley said the fund remains subject to regulatory approval before it can begin trading.

The filing lists Jane Street, Virtu Americas and Macquarie Capital as authorized participants, allowing them to create or redeem large blocks of shares and profit from the arbitrage between Bitcoin’s price and the ETF’s share price. This keeps the ETF’s price close to the value of Bitcoin.

Morgan Stanley recommended a 2% to 4% allocation to crypto portfolios for investors and financial advisers in October 2025 and allowed its financial advisors to recommend crypto funds to clients with individual retirement accounts (IRAs) and 401(k)s.

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Morgan Stanley S-1 filing amendment. Source: SEC.gov

“Morgan Stanley is moving from distributing BlackRock’s IBIT to issuing its own product, capturing management fees directly rather than earning distribution commissions,” Marcin Kazmierczak, co-founder of RedStone, told Cointelegraph, adding that the bank’s 15,000 financial advisors will introduce a real “distribution muscle” for the ETF.

Related: Morgan Stanley, other top holders add Bitmine exposure amid sell-off

Wall Street moves closer to crypto funds

The move adds to a broader push by large US financial institutions to expand access to crypto-related products.

On Jan. 5, 2026, the second-largest US bank, Bank of America, began allowing advisers in its wealth management businesses to recommend exposure to four Bitcoin ETFs, which were previously only available upon request, Cointelegraph reported. 

A day earlier, Vanguard, the world’s second-largest asset manager, enabled crypto ETF trading for its clients, reversing its previous stance on digital asset ETFs.

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Related: Wells Fargo sees ‘YOLO’ trade driving $150B into Bitcoin and risk assets

BlackRock, the world’s largest asset management firm, recommended an up to 2% Bitcoin allocation to its clients in December 2024.

Magazine: Bitcoin’s ‘biggest bull catalyst’ would be Saylor’s liquidation — Santiment founder

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