Key facts
- Igor Runets, founder of BitRiver, has been moved to a pretrial detention facility.
- He faces charges of large-scale fraud.
- Investigators allege he caused over 1 billion rubles ($12.5 million) in damages.
- The charges relate to an unfulfilled $8 million equipment supply contract from 2023.
- BitRiver has been impacted by a six-year ban on crypto mining in several regions.
A Russian court has moved Igor Runets, the founder of the country's largest crypto mining company BitRiver, from house arrest to a pretrial detention facility. Runets faces charges of large-scale fraud, with investigators alleging he caused damages exceeding 1 billion rubles (approximately $12.5 million) by failing to fulfill an $8 million equipment supply contract entered into in 2023 with Infrastructure of Siberia, a subsidiary of the industrial conglomerate En+.
Runets, who was previously detained in February on tax evasion charges, is considered a pioneer in Russia's crypto mining sector. He established BitRiver in 2017 and grew it to operate 15 data centers with over 175,000 servers. However, the company has recently faced significant pressure. A six-year government ban on crypto mining across 10 regions has led to the closure of several mining centers. Furthermore, insolvency proceedings have been initiated against Group of Companies Fox, which holds 98% of BitRiver's authorized capital.