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Dr Tom Redshaw, Lecturer in Digital Society at the º£½ÇÂÒÂ×, said: "This week it was revealed that Donald Trump made over $1billion dollars from his cryptocurrency ventures in 2025, while here in the UK Nigel Farage defended a £5million donation from ‘crypto billionaire’ Christopher Harborne. But why is there so much crypto money flooding into politics and why does this matter?

"The cryptocurrency industry has been buying political influence in the West for years, something that accelerated following China’s decision to ban cryptocurrency ‘mining’ – the process of using hardware to run cryptocurrency networks – due to its exorbitant energy demands in 2021. Since that time, the majority of ‘mining’ has taken place in the US and the crypto industry has taken considerable measures to protect itself from any further regulatory constraints. Thinktanks and lobby groups have been founded to build public support for cryptocurrencies, and spending on lobbying increased dramatically, with $56.44million spent in the US between 2019 and 2023. This proved to be money well spent when Donald Trump won the 2024 US Election, who the Financial Times labelled ‘America’s first Bitcoin President’.

"Cryptocurrencies are digital tokens and theoretically they can be used for many things from making payments to proof of ownership and even self-executing (or ‘smart’) contracts. In reality, cryptocurrencies have been around for almost two decades and in that time have found only two major use cases: gambling and crime.

"The former now constitutes a global industry of ‘financial speculation’ with an estimated 700million users worldwide. Some are proactive ‘traders’ who monitor price fluctuations closely and aim to make money by moving their money between different tokens. Others are more passive and hold cryptocurrency as a long-term investment. While there are success stories, studies reveal similar addiction problems to other forms of gambling and there are many cases in which people have lost their life savings. This latter issue is made worse by how rampant criminality is in the crypto industry. These range from scams and drugs markets to money laundering and terrorist financing, and include some of the biggest cases of financial fraud in history, such as the case of cryptocurrency exchange FTX where customers were defrauded of billions of dollars.

"The problems with the crypto currency industry do not end here, however. As noted earlier cryptocurrency mining is enormously energy intensive. Bitcoin – the most widely used cryptocurrency – requires more energy per year than entire countries. The industry also pursues expansion by exploiting countries with cheap energy and weak regulations, a pattern now referred to by scholars as ‘crypto-colonialism’, as well as seeking to ‘tokenise’ everything from digital art and intellectual property (e.g. the debacle of ‘non-fungible tokens’) to real money (e.g. so-called ‘stablecoins’).

"It is clear from the scholarship that the costs of cryptocurrencies vastly outweigh the benefits they bring to society, yet just this week the Financial Conduct Authority in the UK watered down what was set to be its landmark regulation of crypto after pressure from the industry. With a growing public awareness of its social harms, we may see pressure build for this to change in future."