Russia’s largest crypto miner, BitRiver, is on the brink of collapse after a regional arbitration court opened insolvency supervision against its controlling shareholder — and its founder-CEO, Igor Runets, was reportedly placed under house arrest on tax-evasion charges last week.
What happened
- On January 27, the Arbitration Court of Sverdlovsk Oblast launched bankruptcy observation proceedings against Group of Companies Fox, which holds 98% of BitRiver’s authorized capital. That move follows a claim by Infrastructure of Siberia, a subsidiary of En+ Group.
- According to court filings cited by Kommersant, Infrastructure of Siberia says it paid BitRiver more than $9.2 million (700 million rubles) in advance under an equipment-supply contract that was later terminated when the equipment was not delivered. Attempts to recover the money through enforcement proceedings reportedly failed.
- Separate collection actions are also underway. Rosseti Siberia is seeking about $60,000 (5.4 million rubles) in unpaid electricity bills from Management Company BitRiver under a June 2024 service agreement, according to documents linked by the company’s registration number.
- Court filings indicate multiple procedural breakdowns at BitRiver entities: missed deadlines, failure to provide required documents (such as equipment valuations and proof of ownership), and court notices returned unclaimed. One Irkutsk court returned an equipment-recovery case after plaintiffs twice failed to meet basic requirements despite extensions.
- Accounts tied to BitRiver companies have reportedly been frozen — a development that could paralyze a business already strained by sanctions and operational disruption. Local reporting has described mass executive departures and office closures; BitRiver’s social media has been inactive since early 2022.
Legal and sanctions backdrop
- BitRiver has been under U.S. sanctions since April 2022. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) added BitRiver and ten Russia-based subsidiaries of its Switzerland-based holding BitRiver AG to the Specially Designated Nationals (SDN) list following Russia’s invasion of Ukraine. At the time, Treasury said BitRiver operated large-scale server farms that helped Russia “monetize its natural resources” by selling mining capacity internationally.
- Treasury also noted the company’s business model depended on cheap Russian energy and cold climate advantages, but remained vulnerable to sanctions because of reliance on imported mining equipment and fiat payment channels.
Why it matters
- BitRiver’s potential insolvency would remove one of the largest institutional mining operators in Russia from the market, with possible knock-on effects for capacity that was sold to international customers and for the broader Russian mining ecosystem.
- The combination of legal claims, frozen accounts, managerial departures and long-running sanctions illustrates how geopolitical and commercial pressures can rapidly squeeze mining operators that depend on imported hardware and international payment rails.
Status and response
- Court documents cited in reporting were not immediately available for public review. Decrypt has reached out to BitRiver and relevant Russian authorities for comment and confirmation. Reports of Runets’s house arrest and other developments are based on recent court rulings and local reporting.
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