Russian oligarchs struggling to move their cash, UK sanctions lawyer reveals

Wealthy Russians are having difficulty moving their cash out of the UK, a sanctions lawyer has said, as punitive measures brought in over the invasion of Ukraine begin to bite.

Nigel Kushner, CEO of W Legal, said some oligarchs might buy bitcoin in an effort to preserve their fortunes as the financial world turns its back on Russian money.

The UK has sanctioned a number of Russian individuals, including Vladimir Putin and top figures within the Kremlin, but there have been calls to increase the list of those who have their assets frozen.

Russian banks have also been targeted, with a number being cut out of the Swift international payment messaging system, stopping their ability to operate worldwide.

Kushner told Radio 4's Today programme: "It's been a really unusual week because 90% of those who have been sanctioned in the last 15 years who I have advised come to me after they've been sanctioned, but this week it's been bizarre because they've not yet been sanctioned."

He accused the government of "softening the blow" for some of his clients, as sluggish moves to expand sanctions to include more Russians gives them the opportunity to move their money out of the country.

Read more: Pressure on Boris Johnson to tighten net on Russian oligarchs’ ‘dirty money’

"Some will say that it defeats the whole object of sanctions because they will have spent the last week moving their money out of this jurisdiction," he told the BBC.

But the efforts needed to shift their assets have not been smooth sailing, Kushner says, as many countries have their own sanctions on Russian money.

Most notably the EU, US and Canada have all brought in strict sanctions on money coming in from Russian individuals.

Kushner added: "While you can push a button and move all your millions or billions out of a bank account, you can't easily transfer the title of a house in Belgravia overnight.

"The immediate problem they're going to have is where they're going to move their cash because there aren't many safe havens.

"Many of them don't want to move their funds to Russia, that's the last place they want them, but where do they move them?"

One of their final options is to invest in cryptocurrency, which so far has refused calls to stop trading from Russian digital wallet addresses.

Kushner said: "Some of them might purchase bitcoin, it's really tricky for them.

"It's the only option for some people because no bank in the world other than a Russian bank will touch you once you're on the sanctions list.

"So where do you put your money?"

The government has been accused of being too slow on sanctions, and Boris Johnson is under more pressure to tighten the net on "dirty money" held by oligarchs.

Labour MP Stephen Kinnock said the government was "foot-dragging" on bringing in tougher sanctions.

Chris Bryant told the House of Commons he was "ashamed" of the UK's response to Ukraine, saying the nation needs to go further with who the measures are targeting.

On Wednesday, Chelsea FC owner Roman Abramovich announced he would be selling the club following speculation he would be among those named in the next wave of sanctions.

Watch: One million refugees have fled Ukraine in a week

Figures have shown thousands of Russian households and businesses are converting their money into crypto, after the rouble hit a record low of 110 versus the dollar on Wednesday.

Trading volumes between the rouble and cryptocurrencies hit 15.3 billion roubles ($140.7m) on Monday, a three-fold jump from a week earlier, according to researcher CryptoCompare.

Ukraine's vice prime minister Mykhailo Fedorov has asked crypto exchanges to block the digital wallet addresses of Russian users, a move that would effectively stamp out their ability to trade crypto.

But so far crypto leaders have refused, with Kraken CEO Jesse Powell calling bitcoin the "embodiment of libertarian values".

The spike has worried regulators, with the European Commission looking at whether crypto is being used to get around sanctions, an EU official said on Wednesday.