A Russian banker sanctioned by the White House, Mikhail Klyukin, has sold over £15m worth of shares in UK-based cryptocurrency firm Copper Technologies. The sale has raised concerns about the transparency of cryptocurrency transactions and possible sanctions evasion.
Legal Questions Surrounding the Transaction
Mikhail Klyukin, who owned a 2% stake in Copper Technologies, was sanctioned by the UK Foreign Office due to his involvement with Sovcombank, a Russian lender linked to the Putin regime. Copper Technologies played a significant role in facilitating the transaction by acting as an intermediary and converting the buyer’s payment into cryptocurrency before transferring it to Klyukin.
Legal experts have raised concerns about the transaction’s potential to evade US sanctions. The use of non-US currency and non-American entities creates a legal gray area. Additionally, the use of cryptocurrency may be seen as a violation of a US executive order that prohibits deceptive transactions designed to evade sanctions.
The transaction could also attract “secondary” sanctions from the US, targeting companies or individuals indirectly aiding sanctioned entities.
Copper Technologies Claims Compliance with Sanction Laws
Copper Technologies asserts that its actions were legal and compliant with all relevant sanction laws based on external legal advice. The company emphasizes its commitment to anti-money laundering rules, regulatory guidelines, and sanction laws. They sought advice from legal experts specializing in sanctions and concluded that the transaction adhered to all applicable laws.
Klyukin’s associates confirmed that his businesses have complied with US sanctions, including in the context of selling Copper shares.
Copper Technologies’ chairman, Philip Hammond, reportedly had no knowledge of the share sale but became aware during a review of major shareholders.
Hot Take: Concerns Over Sanctions Evasion in Crypto Transactions
The recent sale of shares in Copper Technologies by a sanctioned Russian banker has raised legal questions and concerns about the transparency of cryptocurrency transactions. With the use of non-US currency, non-American entities, and cryptocurrency, the transaction exists in a legal gray area and may be seen as potentially evading US sanctions.
While Copper Technologies claims compliance with all relevant sanction laws and sought external legal advice, experts point out that the transaction could attract “secondary” sanctions from the US. This case highlights the challenges of regulating cryptocurrency transactions and the need for clearer guidelines to prevent sanctions evasion.
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