BitRiver Founder Faces Charges for $12.5 Million Fraud in Russia

Igor Runets, founder of BitRiver, has been transferred from house arrest to a pretrial detention center as he faces serious fraud allegations.

Allegations of Mining Equipment Fraud

Runets is accused of inflicting damages exceeding 1 billion rubles (around $12.5 million) by failing to deliver $8 million worth of mining equipment to Infrastructure of Siberia, a subsidiary of the En+ group. Reports indicate that this contract was established in 2023, but the promised equipment was never delivered.

This issue has exacerbated the financial troubles of BitRiver, which is already struggling due to a six-year ban on cryptocurrency mining in various regions and ongoing insolvency proceedings. Earlier this year, Runets faced tax evasion charges and was initially placed under house arrest.

Recognized as a pioneer in the Russian crypto mining sector, Runets launched his first data center in Siberia in 2017 and subsequently founded BitRiver, expanding operations to 15 data centers with over 175,000 servers. However, the recent mining ban has led to significant financial setbacks for the company. In February, a regional arbitration court began insolvency proceedings against Group of Companies Fox, which holds 98% of BitRiver’s authorized capital.

The unfolding legal situation leaves both Runets and BitRiver's futures uncertain amidst a challenging regulatory landscape.