The Controversial Sale of Copper Technologies Shares: A Deep Dive into the Legal Complexity

The Controversial Sale of Copper Technologies Shares: A Deep Dive into the Legal Complexity

In the world of cryptocurrency, where transactions are often made in a decentralized and anonymous manner, questions of transparency and compliance with regulations are bound to arise. One such case that has caught the attention of legal experts and regulators is the sale of over £15m in shares of UK-based cryptocurrency firm Copper Technologies by Mikhail Klyukin, a Russian banker who was sanctioned by the White House in March 2022. This article delves into the intricacies of the transaction and its potential implications on the transparency of cryptocurrency dealings and evasion of sanctions.

Copper Technologies, chaired by former Chancellor Philip Hammond, appears to have played a vital role in facilitating the sale of shares by Klyukin. Known for its expertise in building and managing digital systems for digital asset investments and trades, the London-based company acted as an intermediary in the transaction. It converted the buyer’s payment in sterling into cryptocurrency before transferring it to Klyukin, who held a 2% stake in Copper Technologies.

The sale of copper shares by a sanctioned individual raises questions about the transparency of cryptocurrency transactions and potential evasion of sanctions. While the United States has a reputation for stringent enforcement of sanctions, this particular transaction managed to operate in a legal gray area. The use of non-U.S. currency and non-American entities allowed the deal to sidestep financial dealings with sanctioned individuals involving dollars or American citizens.

Furthermore, the use of cryptocurrency in this transaction adds another layer of complexity. A significant concern arises from an executive order issued by U.S. President Joe Biden in April 2021. The order explicitly prohibits deceptive transactions designed to evade U.S. sanctions, including those involving digital currencies. Therefore, the use of cryptocurrency in this sale could potentially be seen as a violation of this order.

Legal experts have raised concerns about the transaction and its compliance with sanctions laws. They suggest that the deal could have attracted “secondary” sanctions from the U.S., targeting companies or individuals indirectly aiding sanctioned entities. As the U.S. endeavors to clamp down on any attempts to evade sanctions, the implications for Copper Technologies and those involved in the transaction could be significant.

Copper Technologies has defended its actions, asserting that the transaction was legal and compliant with all applicable sanctions laws. The company claims to have sought external legal advice, which confirmed their adherence to anti-money laundering rules, regulatory guidelines, and sanctions laws. Additionally, associates of Klyukin have stated that his businesses have complied with U.S. sanctions, including in the context of the sale of copper shares.

Philip Hammond, who became the chair of Copper Technologies in January 2023, insists that he was unaware of the share sale. It was only brought to his attention during a subsequent review of major shareholders. Hammond previously served as an advisor during the transaction but maintains that he had no knowledge of the sale at the time.

The sale of Copper Technologies shares by a sanctioned individual has ignited a debate on the transparency of cryptocurrency transactions and the potential for evasion of sanctions. Legal experts and regulators will closely scrutinize the legality of the transaction, and its implications could extend beyond the immediate parties involved. As the crypto industry continues to evolve, it is crucial for all stakeholders to navigate the legal complexities and uphold transparency to maintain the integrity of the market.

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