The Italian actress and filmmaker said she was “deeply shocked and hurt” by a New York Times article that claimed she had sexually assaulted Jimmy Bennett when he was 17.
In a statement circulated on Twitter by journalist Yashar Ali, she said she had “never had any sexual relationship” and was linked “in friendship only” with the now 22-year-old .
The New York Times reported on Monday that 42-year-old Argento had settled a notice of intent to sue by Bennett with a payment of $380,000 (£298,000).
In the article, Bennett claimed Argento, then 37, had sexually assaulted him in a California hotel room in 2013 and that he had been left traumatised.
The newspaper also reported it had received a selfie of Argento and Bennett in bed, which had been verified by three people.
It also detailed an April letter to Ms Argento from her lawyer, which characterised the money as “helping Mr Bennett” and said “we hope nothing like this ever happens to you again”.
Argento’s statement said her friendship with Bennett had ended after she rose to prominence in the Weinstein case, when Bennett “unexpectedly made an exorbitant request of money” from her.
It said the actor was facing financial problems and knew Anthony Bourdain – Argento’s boyfriend who died in June – was wealthy and had a well-loved reputation.
She said: “Anthony personally undertook to help Bennett economically, upon the condition that we would no longer suffer any further intrusions in our life.”
She described the allegations as “the umpteenth development of a sequence of events that brings me great sadness and that constitutes a long standing persecution”.
Bennett is yet to comment on the events.
Los Angeles County sheriff, Captain Darren Harris, said on Monday investigators were looking into the claims. No police report was filed at the time.
Argento became one of the most well-known activists of the #MeToo movement after she told the New Yorker magazine that Weinstein raped her at the Cannes Film Festival in 1997 when she was 21.
Argento told the magazine that she continued to have a relationship with Weinstein because she was afraid of angering him.
Weinstein is not facing any charges in connection with the allegations made by Argento.