Questions Surround Sanctioned Russian Banker’s Transaction
In March 2022, the White House sanctioned Mikhail Klyukin, a Russian banker. Klyukin had previously held a 2% stake in Copper Technologies, a UK-based cryptocurrency firm chaired by former Chancellor Philip Hammond. Klyukin sold his shares for more than £15 million, raising questions about the potential for cryptocurrency transactions to evade sanctions.
Copper Technologies, which has a subsidiary in New York, acted as an intermediary, converting the buyer’s payment in sterling into cryptocurrency before transferring it to Klyukin. This raises the possibility of a violation of U.S. sanctions, which prohibit financial dealings with sanctioned individuals involving dollars or American citizens. It also could have attracted “secondary” sanctions from the U.S., targeting companies or individuals indirectly aiding sanctioned entities.
Copper Technologies has maintained that its actions were legal and compliant with all applicable sanctions laws, based on external legal advice. They sought advice from external legal experts specializing in sanctions and determined that the transaction adhered to all relevant sanction laws. Associates of Klyukin have also confirmed his compliance with U.S. sanctions.
Philip Hammond, who became the chair of Copper Technologies in January 2023, was unaware of the share sale at the time of the transaction. He was informed later during a review of major shareholders.
The transaction highlights the need for more transparency and enforcement of cryptocurrency transactions to ensure compliance with sanctions laws.
