British investigators have uncovered that a cryptocurrency backed by one of Nigel Farage's most significant donors has been instrumental in supporting Russia's military operations in Ukraine, according to a major National Crime Agency probe.
The Four-Year Investigation
The National Crime Agency has dedicated four years to dismantling a sophisticated multibillion-dollar operation that converts proceeds from UK drug and firearms trafficking into cryptocurrency. This elaborate scheme specifically utilises digital tokens designed to conceal user identities.
Investigators confirm the operation has enabled widespread sanctions evasion and served high-level organised crime networks, including providing money-laundering services directly to the Russian state. Of the $24 million (£18.3 million) in cryptocurrency seized by the NCA and international partners, the overwhelming majority was issued by Tether.
Tether's Profits and Political Connections
Tether, a private company based in El Salvador, has achieved remarkable financial success, reporting £13 billion in profits for 2024 – substantially exceeding McDonald's earnings. The company's ownership remains concentrated among a small group, including Christopher Harborne, one of Britain's most substantial political donors.
Court documents indicate Harborne acquired a 12% stake in Tether around 2016, though his exact share of the company's substantial profits remains unclear. During the 2019-20 period coinciding with Britain's EU departure, Harborne contributed £10 million to Nigel Farage's Brexit party, now known as Reform UK.
In January, Farage accepted an additional £28,000 from Harborne to attend Donald Trump's presidential inauguration. This occurred just one month after US authorities imposed sanctions on Russian operatives managing the laundering networks and publicly identified their use of Tether tokens.
Russian Military Connections and Sanctions Evasion
NCA investigators state that cryptocurrency has dramatically accelerated money laundering activities, with Russian laundering operations transitioning to Tether shortly before 2020. Sal Melki, the NCA's deputy director of economic crime, emphasised that direct connections exist between this money-laundering scheme and companies supporting Russia's military-industrial complex.
Operation Destabilise, launched in 2021 after uncovering a ransomware gang using Russian socialite money launderers, revealed that Smart and TGR networks have moved billions of pounds. The TGR network specifically facilitated electronic component exports to Russia, directly supporting military production despite international sanctions.
Ukrainian President Volodymyr Zelenskyy highlighted the severity of this issue in October, noting that weapons systems Russia deployed during a single day of lethal air attacks contained over 100,000 foreign-manufactured components, including British microcomputers.
The investigation also uncovered Russian intelligence attempts to finance a six-person Bulgarian spy ring in Britain through the Smart laundering network. This espionage operation included targeting an investigative journalist who had helped connect Russian spies to the poisoning of opposition politician Alexei Navalny. The Bulgarian operatives received prison sentences in May following an Old Bailey trial.
Industry Response and Regulatory Challenges
Reform UK, which became Britain's first political party to accept cryptocurrency donations, declined to comment on the revelations. Harborne's legal representatives argued that implicating a Tether investor in crimes committed by token users would be equivalent to accusing the US Treasury of complicity in money laundering because it prints US dollars.
A Tether spokesperson stated the company unequivocally condemns illegal stablecoin usage and remains fully committed to combating illicit activity. The representative noted Tether has blocked or frozen $3.4 billion in USDT through collaboration with over 300 agencies across 62 countries.
However, cryptocurrency experts point out that all demand – including illicit usage – benefits Tether by increasing cash reserves that generate billions in profit. The NCA faces significant challenges regulating Tether, an exceptionally profitable enterprise within a largely unregulated industry headquartered in a Central American nation with limited oversight.
Melki stressed that while the agency cooperates with global crypto firms willing to engage, no cryptocurrency company receives special treatment. He emphasised that all have responsibilities to limit exposure to criminal actors operating within their systems.
