Cryptocurrency backed by Farage donor is used for Russian war effort, investigators say | Nigel Farage
A cryptocurrency backed by one of Nigel Farage’s biggest donors was used to help Russia in its war against Ukraine, British researchers say.
The National Crime Agency spent four years cracking down on a multibillion-dollar scheme in the UK that exchanged money from drug and arms sales for crypto, digital tokens designed to hide the identities of its users.
The agency says this scheme enabled “sanctions evasion and organized crime at the highest level, including providing money laundering services to the Russian state.”
The “vast majority” of the $24 million (£18.3 million) of cryptocurrency that the NCA and its peers abroad have been able to seize so far has been issued by Tether.
Tether, a private company headquartered in El Salvador, has become so popular that it posted a profit of $13 billion in 2024; That’s one and a half times as much as McDonald’s. Tether’s shares are reportedly owned by a small group, including Christopher Harborne, one of Britain’s biggest political donors. Court documents say Harborne took a 12% stake around 2016, but it’s unclear how much of Tether’s profits he got.
In 2019-20, as the UK was leaving the EU, Harborne donated £10 million to Nigel Farage’s Brexit party, which was renamed Reform UK. In January, Farage accepted a further £28,000 from Harborne to attend the inauguration of Donald Trump as president, a month after he became president of the United States. sanctions He publicly warned that laundering networks were using Tether against their Russian bosses.
Reform UK, the first British political party to accept donations in crypto, did not respond to a request for comment. Harborne’s lawyers said accusing the Tether investor of being complicit in crimes committed by token users would be “akin to claiming that the US Treasury is complicit in money laundering because it prints US dollars.”
While there is no suggestion that Harborne himself was involved in a money laundering scheme, some of his wealth appears to have come from a company whose cryptocurrency was in high demand from illicit networks such as the Russian ones uncovered by the NCA’s Operation Destabilization.
Unlike volatile cryptocurrencies like Bitcoin, Tether’s tokens are stablecoins whose value is pegged to the dollar, making them easy to exchange for real currencies. Buyers of newly minted Tether stablecoins, called USDT, pay one dollar for each. Tether holds this money to maintain its stablecoin peg and makes money from interest or investment returns. Approximately 184 billion USDT in circulation.
A Tether representative said the company “unequivocally condemns the illegal use of stablecoins and is fully committed to combating illegal activity.”
Quick Guide
Contact Tom Burgis about this story
To show
If you have something to share on this topic, you can contact Tom using one of the methods below.
Email (not secure)
If you don’t need a high level of security or privacy, you can email tom.burgis@theguardian.com.
Secure Messaging in the Guardian app
The Guardian app has a tool where you can send tips about stories. Messages are end-to-end encrypted and hidden within the routine activities each Guardian mobile app performs. This prevents the observer from even knowing that you are communicating with us, let alone what is being said.
If you don’t have the Guardian app yet, download it (iOS/Android) and go to the menu. Select ‘Secure Messaging’.
To send Tom a message, please select the ‘UK Investigations’ team.
SecureDrop and other secure methods
If you can safely use the Tor network without being observed or tracked, you can send messages and documents to the Guardian through our SecureDrop platform.
Finally, our guide at theguardian.com/tips lists various ways to contact us securely and discusses the pros and cons of each.
“Tether tokens are typically traded through secondary markets and peer-to-peer platforms. These flows are not controlled by Tether, but we remain alert and ready to take action when law enforcement detects illegal activity,” the spokesperson added.
But crypto experts say all the demand, including illegal demand, benefits the company by increasing Tether’s cash reserves, from which it generates billions in profits.
Harborne, a former McKinsey consultant, is not an executive at Tether. there is that too interests aviation fuel, military contractors and, in Thailand, where he lives, a wellness center with British and Thai names. He describes himself as an “extremely private person.”
As well as helping Farage and his parties, Harborne has also given money to the Conservatives and donated £1 million to Boris Johnson, who leaves Downing Street in 2022. The Guardian revealed that after the donation, Harborne accompanied Johnson on his visit to Ukraine. Neither said why.
Johnson did not respond to a request for comment. A Tory spokesman said: “All donations to the Conservative party are accepted in good faith and only after thorough review to ensure they come from permitted sources. We take our legal and compliance responsibilities extremely seriously.”
Cryptocurrency has “turbocharged” money laundering, NCA investigators say, with Russian money laundering scheme switching to Tether shortly before 2020.
Sal Melki, the NCA’s deputy director for economic crime, said: “A line can be drawn on this money laundering scheme to support companies located in the Russian military-industrial base.”
The NCA launched Operation Destabilization in 2021 following the discovery of a ransomware ring whose proceeds were laundered by a Russian socialite. Investigators working with US, French and Irish counterparts found that the money laundering network known as Smart, known as TGR, had transferred billions of pounds.
NCA investigators believe the TGR network “supports companies located in the Russian military-industrial base.” They say it “facilitates the export of electronic components to Russia.”
Western countries have imposed sanctions to restrict Putin’s regime’s access to computer chips and other hard-to-find components for drones and missiles, but weapons continue to pour into Ukraine. Ukrainian President Volodymyr Zelenskyy, in question In October, it said the weapons systems Russia used in a single day of deadly airstrikes contained more than 100,000 foreign-made parts, including British microcomputers.
NCA investigators say Russian intelligence agents attempted to fund a spy ring of six Bulgarians operating in the UK through the Smart laundering network. The espionage included the capture of an investigative journalist who helped frame Russian spies in the poisoning of opposition politician Alexei Navalny. The Bulgarians were jailed in May following the Old Bailey trial.
Investigators say the networks also helped wealthy Russians in the West access cash – up to £100,000 at a time – to maintain their accustomed lifestyles despite sanctions.
The NCA has little control over Tether, an extraordinarily profitable enterprise in a largely unregulated industry rooted in a Central American dictatorship.
Melki said: “We work with any global crypto company that wants to work with us, as well as those regulated in the UK, but there is no free pass for crypto companies. They all have a role to play in limiting their exposure to bad actors.”
A Tether representative said it has a “proven track record as an industry leader in working with global law enforcement to stop bad actors.”
The representative added that the company has frozen or blocked more than $3.4 billion USDT by collaborating with more than 300 agencies in 62 countries.
