New disclosures suggest Christopher Harborne, who recently gave £1m to the office of former UK prime minister Boris Johnson, helped stablecoin operator Tether circumvent a block on access to the US banking system.
The Wall Street Journal said on Friday that false documents and shell companies were used to open bank accounts that were then used to move money on behalf of Tether and its sister company, Bitfinex, which had been prevented from making dollar transfers.
One of the companies apparently used to move money on behalf of Tether and Bitfinex was owned by Christopher Harborne, himself a shareholder in both companies, the WSJ said.
Harborne owns around 13 percent of Tether Holdings, the legal entity issuing tether tokens, as well as a similar amount of shares in Bitfinex, a cryptocurrency exchange with significant common ownership, the WSJ said last month, citing non-public documents.
Tether is the largest US dollar stablecoin, with $72bn in assets. Stablecoins are widely used in the cryptocurrency markets and in countries subject to sanctions or with otherwise restricted access to the global financial system.
Harborne’s donations to Johnson and Brexit
Harborne, who is resident in Thailand, is a major political donor in the UK, where he has supported Brexit and the former UK prime minister, Boris Johnson.
In January 2023 Harborne gave £1m to Johnson’s office, the largest-ever donation to an individual UK member of parliament.
In November 2021 cryptocurrency news site Protos said that Harborne had received more than $70million in tether tokens in early 2019. These tokens were paid to an account in the name of an alternative Thai identity held by Harborne, “Chakrit Sakunkrit”, Protos said.
According to Protos, shortly after receiving tether tokens Harborne made large donations to pro-Brexit political parties in the UK.
UK electoral commission records show Harborne donated roughly £10m to Nigel Farage’s Reform UK between April 2019 and February 2020.
In 2020 a journalist on BBC current affairs programme Panorama attempted to interview Farage about Harborne’s donations to his party and the fact that the donor had two separate identities, but Farage cut the call short.
Circumventing a block on bank account access
In its March 3 report, the WSJ said that Harborne had apparently helped Tether and Bitfinex get round a block on access to a US bank called Signature Bank.
According to the WSJ, Signature closed two bank accounts linked to Tether and Bitfinex in 2018 and rejected a further request by Bitfinex to open an account.
In an apparent attempt to get past Signature Bank’s refusal to deal with Bitfinex and Tether, said the WSJ, Harborne used an aviation fuel broker he owned, called AML Global, to open an account with Signature to trade cryptocurrency for dollars. He then apparently used the account to move money for Bitfinex and Tether.
Operating a bank account on behalf of a third party is one of the major flags for money laundering activity.
In its application to open an account with Signature Bank, AML Global said its trading activity would be controlled by Harborne, but it didn’t mention Harborne’s second identity, Chakrit Sakunkrit.
Had AML Global done so, the WSJ said, the account application would likely have been rejected by Signature, because the Sakunkrit name had earlier been added to a list of names the bank felt were trying to evade anti-money-laundering controls.
According to documents seen by the WSJ, Signature staff later questioned in internal emails why the AML account, which was supposed to be hedging aviation fuel trades on the Kraken cryptocurrency exchange, was being funded via large fiat currency inflows from Bitfinex.
“Bitfinex was not mentioned anywhere in the paperwork that was provided [by AML],” the WSJ reported one Signature executive as writing in an internal email.
“If they are buying/selling with Kraken, why is the money only coming in from Bitfinex?” the WSJ cited the Signature executive as saying.
In early 2019, the New York attorney general filed a lawsuit against Tether, alleging that the stablecoin operator had lied about its reserve backing and operated with insufficient reserves in 2018, while also commingling client and corporate funds. The case was settled in 2021.
Harborne, arms sales, Johnson and Ukraine
Christopher Harborne is also the largest single shareholder in UK defence technology Qinetiq, with a stake exceeding 10 percent.
In November Qinetiq said that its income had been boosted by the Ukraine war, with rising sales of products ranging from battlefield robots to communications systems.
Among global politicians, former UK prime minister Johnson has been the most vocal supporter of arms shipments to Ukraine, even after leaving office in July 2022.
Last month former Israel prime minister Naftali Bennett said on his YouTube channel that he had been close to mediating a settlement between Russia and Ukraine in March 2022, in the early days following Russia’s invasion.
Over the course of several days the two warring sides exchanged a “marathon of drafts” of a negotiated settlement through him, said Bennett.
However, Bennett said on YouTube, the agreement failed. Boris Johnson and Joe Biden took an aggressive line against a settlement between Kiev and Moscow and blocked it, insisting that the Ukrainians continue to fight Putin, Bennett said. He said he regarded this decision as wrong.
On March 3, Tether responded to the Wall Street Journal article, saying it contained stale allegations from long ago and was “wholly inaccurate and misleading”.
“Bitfinex and Tether have world-class compliance programs and adhere to applicable Anti-Money Laundering, Know Your Customer, and Counter-Terrorist Financing legal requirements”, Tether said.
“Bitfinex and Tether are proud partners of global law enforcement, and routinely and voluntarily assist the United States Department of Justice and other law enforcement organizations across the world in preventing money laundering, terrorism, and other crimes by bad actors,” Tether said.
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