Summary
- A Russian court transferred BitRiver founder Igor Runets from house arrest to a pretrial detention facility to face charges of large-scale fraud tied to an alleged failure to deliver crypto mining equipment.
- Investigators say Runets caused more than 1 billion rubles (about $12.5 million) in damages by not fulfilling an $8 million equipment contract with Infrastructure of Siberia, a subsidiary of the En+ industrial conglomerate.
- Runets, previously charged with tax evasion, and his company BitRiver have come under mounting pressure as a six-year regional ban on crypto mining and related insolvency proceedings destabilize the firm’s once-expansive Siberian data center operations.
A Russian court transferred Igor Runets, the founder of the country’s largest crypto mining company BitRiver, to a pretrial detention facility to face trial for fraud, Pravo.ru reported on Thursday.
Runets is charged with “large-scale” fraud, as reported by the news service. Investigators allege he caused damages exceeding 1 billion rubles ($12.5 million) by failing to deliver equipment to Infrastructure of Siberia, a subsidiary of En+, a multibillion-dollar corporation that produces 5% of the world’s aluminum and also manages digital, technology and crypto mining infrastructure projects.
Russian law enforcement officials say that in 2023, Runets entered into an equipment supply contract worth $8 million that it never fulfilled, as reported by Pravo.ru.
Runets, a crypto mining pioneer in Russia, was reportedly detained and placed on house arrest in February on three charges of tax evasion. The Stanford University MBA graduate began building a crypto mining data center in Siberia in 2017, the same year he founded BitRiver. He later expanded the operation to 15 data centers with more than 175,000 servers.
Following the closure of several of his crypto mining centers due to a six-year government ban across 10 regions, BitRiver began facing financial issues. A regional arbitration court opened insolvency proceedings against its controlling shareholder, Group of Companies Fox, which owns 98% of BitRiver’s authorized capital, in February.
