Banker under sanctions sold shares in ex-chancellor's firm

A Russian banker who has been placed under sanctions sold more than £15m of shares in a cryptocurrency firm chaired by the former chancellor Philip Hammond in a transaction experts say could have attracted scrutiny from US sanctions enforcers.

- Rob Davies

Executives at the London-based Copper Technologies are understood to have become concerned when Mikhail Klyukin, who owned more than 2% of the company, was put on the White House sanctions list in March 2022. Klyukin was placed under sanctions because of his role on the supervisory board of the Russian lender Sovcombank, as the US targeted “elites close to [Vladimir] Putin” after the invasion of Ukraine.

The Guardian understands that Copper, which has a subsidiary based in New York, helped arrange a transaction designed to remove Klyukin from its shareholder register.

The transaction raises fresh questions about the use of crypto-currency and the transparency around often opaque payment methods, as crypto comes under growing scrutiny from western governments trying to enforce sanctions against Moscow. Copper builds and manages digital systems for companies aiming to invest in, trade or use cryptocurrency.

The company told the Guardian it had complied with applicable sanctions law at all times, based on external legal advice.

Copper appears to have in effect acted as an intermediary between Klyukin and a company willing to buy the Russian banker’s shares.

The crypto company is understood to have collected payment from the buyer – who paid more than £15m for the shares – in sterling. Copper then converted the sterling into cryptocurrency and transferred those digital assets to Klyukin, the Guardian understands.

The share sale appears to have been designed to avoid breaching US sanctions, which prohibit the use of dollars, or the involvement of American citizens, in financial dealings with individuals under sanctions.