RUSSIAN BANKER UNDER SANCTIONS SELLS OFF £15 MILLION IN SHARES OF UK CRYPTOCURRENCY FIRM

Mikhail Klyukin, a Russian banker hit by White House sanctions in March 2022, has offloaded over £15 million worth of shares in the UK-based cryptocurrency company Copper Technologies.

Copper Technologies, which has a connection to former UK Chancellor Philip Hammond, seems to have been a key player in this transaction, prompting discussions about the opacity of cryptocurrency dealings and the risk of sanction circumvention.

Russian Banker’s Sanctioned Share Sale Sparks Controversy

Klyukin, who had a 2% holding in Copper Technologies, fell under UK Foreign Office sanctions due to his ties with Sovcombank, a Russian bank associated with the Putin administration. These sanctions were part of the U.S. reaction to Russia’s invasion of Ukraine, aiming at individuals linked to the Russian government.

Copper Technologies, operating from London and with a branch in New York, was instrumental in facilitating Klyukin’s share sale. The firm, specializing in the creation and management of digital asset investment and trading systems, reportedly acted as a go-between, converting the sterling payment from the buyer into cryptocurrency before transferring it to Klyukin.

Legal professionals have expressed concerns regarding the sale, highlighting the potential for U.S. sanctions evasion. The U.S. has strict rules against financial transactions with sanctioned entities involving U.S. dollars or citizens. However, this deal navigated these restrictions by employing non-U.S. currencies and non-American parties, thus operating in a legally ambiguous zone.

The involvement of cryptocurrency in the transaction adds to its complexity. An executive order from U.S. President Joe Biden in April 2021 specifically forbade transactions designed to skirt U.S. sanctions, including those utilizing digital currencies. Hence, the cryptocurrency aspect of this deal might be construed as a breach of this order.

Experts suggest that such a transaction might also trigger secondary sanctions from the U.S., targeting those indirectly aiding sanctioned individuals or companies.

Copper Technologies Asserts Legal Conduct in Transaction

Copper Technologies insists that its involvement was lawful and in line with all relevant sanctions regulations, based on advice from external legal counsel.

A spokesperson for Copper emphasized the company’s adherence to anti-money laundering standards, regulatory directives, and sanctions regulations. They noted that the transaction’s aim was to facilitate the sale of Copper shares owned by a company associated with a sanctioned individual.

The firm sought guidance from sanctions law experts and concluded that the transaction complied with all pertinent sanctions laws.

Klyukin’s associates also verified that his business activities, including the Copper share sale, have abided by U.S. sanctions.

Philip Hammond, who took up the chairmanship of Copper Technologies in January 2023 and was an advisor during the transaction, reportedly was not informed of the share sale initially. He learned about it later during a review of significant shareholders.

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