KEY POINTS
- Harborne and AML reportedly alleged that WSJ's article "falsely accused" the plaintiffs of illegal activities
- WSJ reported early in 2023 that Bitfinex "backers" falsified documents to maintain access to global banking
- Tether was recently under fire over a UN report alleging the USDT was being used in illicit activities
The Wall Street Journal is faced with a defamation lawsuit over its February 2023 article that alleged companies behind crypto exchange Bitfinex, an affiliate of Tether, conducted illicit activities to stay afloat amid issues with retaining access to the global banking system in 2018, a new report revealed.
The lawsuit, which was filed by British businessman Christopher Harborne and his company AML Global, was first revealed by investigative platform OffshoreAlert.
The complaint reportedly alleged "defamation regarding an article" by WSJ in February 2023 wherein Harborne and AML Global were featured in at least five paragraphs in the article, specifically on the company's application for an account at Signature Bank.
Filed Feb. 28 at the Delaware Superior Court against WSJ parent Dow Jones & Company, the complaint allegedly stems from the article wherein WSJ "falsely accused Plaintiffs Christopher Harborne ('Mr. Harborne'), and AML of committing fraud, laundering money, and financing terrorists – even though the Journal and its reporters knew and possessed documentation that conclusively showed that those accusations are false."
Harborne is a shareholder of the stablecoin issuer Tether and is said to hold nearly 13% of the cryptocurrency firm – the stake reportedly obtained through crypto exchange Bitfinex's reimbursement plan in the wake of a massive exploit of the exchange in 2016.
The Journal article alleged that "backers" of Bitfinex were having a hard time maintaining "access to the global banking system" late in 2018. The article stated that the issue led companies behind Bitfinex to "tap shadowy intermediaries, falsified documents and shell companies to get back in," citing emails and documents.
Content regarding AML Global and Harborne were removed from the article since Feb. 21, 2024. An Editor's Note was also added, stating that the section featuring Harborne and AML Global were removed "to avoid any potential implication that AML's attempt to open an account there [Signature Bank] was part of an effort by Tether, Bitfinex or related companies to mislead banks, or that Harborne or AML withheld or falsified information during the application process."
Meanwhile, Tether was recently under scrutiny after the USDT stablecoin issuer was implicated in a recent United Nations Office on Drugs and Crime (UNODC) for alleged use of the token in money laundering and secret financial networks in East and Southeast Asia.
"Tether tokens, using public blockchains, make it possible to meticulously track every transaction, making it an impractical choice for illicit activities," the issuer said in a challenge to the UN report. It added that its oversight measures were more stringent than those employed by traditional banks.
