Nigel Farage and his right-wing Reform UK party have been hit by a series of scandals following the disclosure of an undeclared personal gift of 5 million pounds ($6.7m) to the embattled politician by cryptocurrency billionaire Christopher Harborne.

The gift, received before Farage became a member of parliament, is in addition to some 25 million pounds ($33.6m) in funding given directly to his party by Harborne. Amid growing controversy over the funding and his close association with convicted fraudster George Cottrell, Farage has made international headlines by resigning from Parliament and campaigning to regain his seat in a contest he has cast as himself versus “the establishment”.

However, all other leading parties in the United Kingdom have dismissed the move as a stunt and refused to put up candidates against him, leaving Farage’s principal political opponent for his Clacton seat as the satirical novelty candidate Count Binface.

Meanwhile, amid the whirl of memes and satirical commentary, both criminal and parliamentary investigations into the donations are continuing, with public scrutiny continuing to focus on Farage’s ties to Tether, Harborne’s “stable” cryptocurrency that has been widely linked to drug cartels, fraud and human trafficking — claims the company disputes.

Political and legal risk

“Farage and Reform are in a significant amount of trouble, and I think it’s only now beginning to dawn on them how much,” Sam Power, a leading expert in political financing, electoral regulation and corruption at the University of Bristol, told Al Jazeera.

Power said the Harborne donation scandal had hurt Reform in the Makerfield by-election, where their candidate lost to new Prime Minister Andy Burnham.

“Politicians often assume that standards and ethics will never make the top 10 of voter concerns alongside healthcare and housing, but they do,” Power continued.

Reform, he said, currently held about 20 percent of the British vote solidly. That will not shift away. “But the remaining 10 percent they have — and will need to build upon to win an election — is already melting away,” Power said.

That Harborne would seek to back Farage and Reform was axiomatic, analysts have suggested.

Farage’s championing of cryptocurrency and opposition to government regulation of it are both longstanding and reflective of Farage’s right-wing allies in the administration of United States President Donald Trump, many of whom are tied closely to the world of cryptocurrency, estimated to be valued at somewhere between $2.2 trillion and $4 trillion worldwide, depending on market conditions.

Dangerous ground

“Crypto was born in the wake of the [2008] financial crisis as a way of separating payments — and essentially money — from banks and central banks,” economist Frances Coppola explained, describing early moves to privatise monetary control, freeing it from government — and in some cases democratic — oversight.

“The political underpinnings of crypto are essentially anarcho-capitalism,” Coppola continued. “It’s a rejection of the role of [centrally regulated] banks and central banks, and giving control over currencies to private companies,” she said.

That makes the “unregulated and fairly freewheeling world of crypto” intrinsically attractive to politicians on the far right and libertarian side of the political spectrum, Power said.

“It’s ideological as much as anything else: this idea that they’re all against the ‘establishment’,” he said. “There’s also the causal arrow of influence, where it’s not clear where the nexus of decision between the tech bros, Christopher Harborne, and Reform lies. It’s a mutually reciprocal relationship — at least, Harborne and others likely expect it to be.”

Murky waters

However, the lack of government involvement and difficulties in monitoring the use of the cryptocurrencies championed by Farage are having real-world impacts. As well as allowing for almost parallel economies in many developing countries, cryptocurrencies, including Tether, have become the currency of choice for organised crime.

While Tether, the company that launched the crypto, has stressed that it is actively working with authorities to combat the illicit use of its currency, the accusations against it are widespread. In Southeast Asia, specifically, the cryptocurrency has allegedly been used to abet human trafficking on an industrial scale and underpin scams and fraud operations worth millions. In 2024, a report by the United Nations Office on Drugs and Crime concluded that Tether was the “preferred choice for crypto money launderers” in Southeast Asia.

“Crypto remains the currency for fraud,” said David Gerard, author of the Pivot to AI blog, who has written extensively on cryptocurrency. “If you look at human trafficking in places like Cambodia, it’s Tether that those carrying it out are relying upon.”

“Of course, when transgressions are reported, they react,” he said, reflecting the views of many who have highlighted Tether’s role in enabling global corruption networks, “but that’s often after the fact and too late”.

Farage has been documented using a September meeting with Bank of England Governor Andrew Bailey to push back against the central bank’s plans to establish its own digital currency, which would have competed directly against Harborne’s Tether.

But the party denies any wrongdoing. Al Jazeera has also sought comments from Reform on other criticisms of Farage’s links to the crypto industry and Harborne, but has not received any response yet.

The Bank of England, meanwhile, has confirmed to Al Jazeera that no decision has yet been taken on whether to proceed with a digital pound, its proposed virtual currency.

To be sure, Farage has repeatedly denied being unduly influenced by Harborne, claiming that the 5 million pounds paid to him was a gift that he is free to spend entirely as he sees fit. However, while this last point remains the subject of a parliamentary investigation, others have sounded warnings over the potential influence of crypto on UK politics.

“I think we should be worried about politicians that are too close to crypto,” said Lucy Harley-McKeown, cofounder of Project Glitch, a blog examining emerging technologies. “I think we should be worried about who has control and influence over the democratic process. We should be concerned about the level of corruption adjacent to crypto and particularly what we’re seeing in the US,” she said.

Harley-McKeown was referring to Fairshake, a crypto-funded political action committee (PAC) powerful enough to swing elections that has funded pro-crypto politicians of all stripes across the country. Harley-McKeown also pointed to the case of the US president, who disclosed $1.4bn in personal income from crypto, including the sale of his Trump meme coin, in the 12 months leading up to June.

“This is the example Farage is looking towards,” Harley-McKeown said. “It’s not inconceivable that one day we could even be looking at a Farage Coin.” (Al Jazeera)

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