Nigel Farage, the Reform UK leader, has invested £215,000 in a bitcoin treasury company named Stack BTC. The company, which buys cryptocurrency on behalf of shareholders and aims to purchase other companies with the increase in value from holding bitcoin, has seen its investments fall by 15.48% since its launch in March this year, resulting in a loss of £565,000.
Farage's Involvement and Scrutiny
Farage, who faces a standards probe over an undeclared £5m gift from crypto billionaire Christopher Harborne, is the second largest shareholder in Stack BTC with a 5.61% stake. The largest shareholder is Paul Withers, owner of gold dealer Direct Bullion, who holds 20.72% of shares. Former Conservative chancellor Kwasi Kwarteng serves as executive chair with a 3.55% stake.
Farage appeared in a promotional video for Stack BTC earlier this year, showing him spending £2m of the company's money on bitcoin. A Reform spokesperson stated that Farage does not have a brand-ambassador role but simply bought shares. However, the video has drawn attention to his relationship with the company.
Expert Warnings
Finance experts have cautioned against investing in bitcoin treasury companies. Susannah Streeter, chief investment strategist at Wealth Club, said: 'Such a steep fall in value shows just how brutally volatile these assets remain and companies that simply stack up bitcoin holdings have no diversification cushion to soften the blow when prices turn.' She added that endorsements by public figures can give 'a veneer of legitimacy the underlying asset doesn't deserve.'
Peter Schiff, the US stockbroker who correctly predicted the 2008 financial crash, advised against investing in any bitcoin treasury company, noting that politicians promote these firms 'because they are trying to get votes from people who own bitcoin.'
Dan Coatsworth, head of markets at AJ Bell, pointed out that Stack BTC has changed its name multiple times, which could be a red flag. He said: 'So far, Stack BTC has nothing to show but a series of ill-timed bitcoin investments.'
Political Reactions
The Liberal Democrats have called for a ban on MPs promoting specific financial services and products. Lisa Smart MP, the Lib Dem Cabinet Office spokesperson, said: 'It's a disgrace that whilst the country grapples with the cost of living crisis, Nigel Farage is busy encouraging people to put money into what could be highly risky crypto investments.'
Farage and his party have previously called for deregulation of cryptocurrency, proposing a 'bitcoin reserve fund' and allowing HMRC to accept crypto for tax payments. Stack BTC declined to comment.
