A sanctioned Russian oligarch who sold £15 million of shares in a crypto firm chaired by the former UK chancellor, is believed to have had the funds transferred into cryptocurrency in an attempt to avoid breaching US sanctions, The Guardian reports.
Mikhail Klyukin owned 2% of shares in the crypto infrastructure firm Copper Technologies before selling it in May 2022 for £15 million.
The Guardian understands that Copper acted as an intermediary, converting the buyer’s sterling into cryptocurrency before forwarding it to Klyukin. It reports that the sale looks to have been designed to skirt US sanctions, which outlaw the use of dollars or the involvement of US citizens in financial dealings with sanctioned individuals.
Hundreds of Russian elites, including Klyukin, were sanctioned by the US in March 2022 following the invasion of Ukraine. Klyukin was previously on the supervisory board of Sovcombank, a Russian private bank ranking ninth in held assets.
Legal experts claim secondary sanctions from the US were a possibility. The use of crypto in this share deal would have been an aggravating factor, they said, if the US knew a deal with the sanctioned Russian banker was taking place.
Firm linked to UK politician helped oligarch dodge sanctions
Former UK chancellor Philip Hammond previously acted as a supervisor for Copper during the share sale before becoming a chairman in January 2023. Hammond was reportedly oblivious to the transaction at the time but learned of the deal during a shareholder review. Klyukin was sanctioned by the UK Foreign Office in September 2022.
According to The Guardian, a spokesperson denied Copper acted as an “intermediary” for Klyukin’s share sale. They said it was intended to “divest shares in Copper held by a company associated with a sanctioned individual.”
“We carefully considered the implications, including with the assistance of specialist external sanctions counsel in various jurisdictions, and concluded that the transaction was compliant with all applicable sanctions requirements. That remains the case today,” the spokesperson said.