The founder of BitRiver, Igor Runets, has been moved from house arrest to a pretrial detention facility as he confronts allegations of large-scale fraud.
Runets Accused of Failing to Deliver Mining Equipment
According to reports, Runets is facing accusations that he caused damages exceeding 1 billion rubles (approximately $12.5 million) by not fulfilling a contract for $8 million worth of mining equipment with Infrastructure of Siberia, a subsidiary of the En+ industrial group.
Russian law enforcement officials stated that Runets entered into this contract in 2023 but failed to deliver the promised equipment. This situation has compounded the difficulties faced by BitRiver, which has already been under strain due to a six-year ban on crypto mining in several regions and subsequent insolvency proceedings.
Runets has been previously charged with tax evasion and was placed under house arrest earlier this year. He is noted as a pioneer of crypto mining in Russia, having established his first data center in Siberia in 2017, the same year he founded BitRiver. His operations expanded to 15 data centers housing over 175,000 servers.
However, following the enforcement of the mining ban, BitRiver has experienced significant financial challenges. In February, a regional arbitration court initiated insolvency proceedings against Group of Companies Fox, which controls 98% of BitRiver’s authorized capital.
As the legal proceedings continue, the future of both Runets and BitRiver hangs in the balance amid a tumultuous regulatory environment.