- The White House put Mikhail Klyukin on the sanctions list in March 2022
- Copper acted as the middleman between Klyukin and a company that wanted to purchase his shares
- Hammond became chair of the company Copper in January this year
Mikhail Klyukin, a Russian banker under sanctions, sold more than £15m of shares equivalent to $19 million in a cryptocurrency company chaired by former UK chancellor Philip Hammond, The Guardian reported. According to experts, the transaction could have attracted scrutiny from US sanctions authorities.
Hammond’s firm, the London-based Copper Technologies, became worried when the White House put Mikhail Klyukin on the sanctions list in March last year. He held over 2% in the company. Copper creates and manages digital systems for firms involved in cryptocurrency trading.
Copper acted as the middleman between Klyukin and a company that wanted to purchase his shares. It received payment in GBP, amounting to more than £15m. Then, Copper converted the amount into cryptocurrency and transferred it to Klyukin.
Avoiding US sanctions
The transaction appeared to have been designed to avoid violating US sanctions, which forbid involvement of US citizens and the use of dollars in financial dealings with persons on sanctions lists.
When the shares were sold in May last year, Klyukin was on the White House’s sanctions list because of his senior position at Russian lender Sovcombank. According to the UK Foreign Office, his position with the bank meant he supported the Russian government and Putin. He has since resigned from that position.
Copper has denied acting as a middleman in the share sale.
Hammond was not aware of the deal
Hammond did not become chair of the company until January this year. At the time of the deal, he was an adviser to the company. The Conservative party member also served as secretary of defense secretary and foreign secretary. He joined the House of Lords in 2020.
His position with Copper entitled him to a share of 0.5%, which was worth as much as $15 million before the crypto market declined. He was not aware of the deal when it took place, but learned about it later.
Very few people at Copper were aware of the sanctioned shareholder’s identity as he held his stake via Zayelco, a Cyprus-based company. Klyukin owns Zayelco and holds a Cypriot passport.
