Nigel Farage is facing a formal investigation by the parliamentary standards watchdog over a £5m gift from the crypto billionaire Christopher Harborne.

The Reform UK leader received the money weeks before announcing he would stand as a candidate in the 2024 general election.

Farage has said the gift, first revealed by the Guardian, was intended to cover his personal security costs and therefore did not need to be declared. However, other parties argue that the money from the Thailand-based businessman falls within rules requiring MPs to declare any potentially relevant gifts or donations received in the 12 months before entering parliament.

Daniel Greenberg, the parliamentary commissioner for standards, is understood to have begun an investigation under rule 5 of the code of conduct obliging MPs to “fulfil conscientiously” requirements relating to their registration of interests.

It states that new MPs must register all their current financial interests, and any registrable benefits (other than earnings) received in the 12 months before their election. This must be done within one month of their election, and they must register any change in those registrable interests within 28 days.

If the investigation finds Farage committed a particularly serious breach of parliamentary declaration rules, he could be suspended from the Commons. A suspension of 10 days or more could trigger a recall petition, potentially forcing him to fight again for his Clacton seat.

There is no fixed timetable for investigations by the commissioner as individual cases vary in complexity.

A speech Farage was to give on Thursday evening to supporters in Sunderland, a key target for Reform, was “temporarily postponed” by the party after the investigation was announced.

Reform said the reason for the postponement was “the chaos in government and an impending Labour leadership race”. However, news of the investigation has overshadowed attempts by the party to capitalise on its historic breakthrough in the elections last week.

A Reform UK spokesperson said: “Mr Farage’s office is in communications with the parliamentary commissioner for standards. He has always been clear that this was a personal, unconditional gift and no rules were broken. We look forward to this being put to bed once and for all.”

​Farage also faces the prospect of a second inquiry after the Electoral Commission – the independent body that oversees elections and regulates political finance in the UK – received a complaint from the Conservatives over the £5m from Harborne.

The elections watchdog has told the Tories it is considering the complaint and will respond by the end of the week. It had said earlier that it would respond to the Conservatives by 12 May, after the elections in Scotland, Wales and parts of England.

A Conservative party spokesperson said: “£5m is an enormous amount, more than most people will earn in a lifetime. Nigel Farage needs to explain how he got it, why he got it, and why he didn’t declare it. If there is a simple answer then he should welcome these investigations. But like so often with Reform, there is something very fishy about the whole story.”

Anna Turley, the chair of the Labour party, said after news of the standards inquiry broke: “Nigel Farage has been avoiding legitimate questions since news of his billionaire backer’s ‘gift’. It’s right that he faces a proper investigation. Farage and Reform clearly believe it’s one rule for them, and another for everyone else.​”

Harborne has become a pivotal figure in British politics, bankrolling Farage personally and the parties he has led over the past seven years. Last year, the businessman donated £9m to Reform UK, the largest single donation by a living person to a British political party. In total, he gave £12m to the party in 2025.

Asked about the gift on the BBC, one of Reform’s MPs, Danny Kruger, reiterated the party’s position on Wednesday that the money was a not a political donation. “It was made before he was an MP, before he was back in politics. He has explained it. This was a gift made directly to Nigel and he has explained he will be using that money to pay for his own security, which the government does not pay for.

“He is a high-risk politician and for the rest of his life he is going to need very expensive security and he has that now funded personally.”