BitRiver Founder Igor Runets Placed Under House Arrest as Russia’s Crypto Mining Giant Faces Mounting Legal and Financial Pressure

Igor Runets, the founder of BitRiver, Russia’s largest industrial crypto mining company, has been placed under house arrest on tax evasion charges, according to reports from Bloomberg and local Russian media. Runets was detained on Friday and is facing three criminal charges related to allegedly concealing assets to avoid paying taxes. His legal team has a limited window to appeal the house arrest decision before it becomes fully enforceable on Wednesday. If the appeal is denied or not submitted, Runets will remain confined to his residence for the duration of the legal proceedings.

At 39 years old, Runets is considered a pioneer in Russia’s crypto mining sector. A Stanford University MBA graduate, he founded BitRiver in 2017 and quickly expanded operations across Siberia, leveraging the region’s cheap energy and cold climate. At its peak, BitRiver operated 15 data centers housing more than 175,000 servers, with a total capacity of around 533 megawatts. The company once controlled more than half of Russia’s industrial crypto mining capacity. In 2022, the U.S. imposed sanctions on BitRiver following Russia’s invasion of Ukraine, significantly limiting its access to international clients and capital.

Legal troubles are compounding BitRiver’s challenges. On Monday, Russian business newspaper Kommersant reported that the company is facing potential bankruptcy after a subsidiary of En+ Group filed an insolvency claim in a regional arbitration court. The lawsuit alleges that BitRiver’s parent company, Fox Group, failed to deliver prepaid mining equipment, with damages exceeding $9.2 million. Court-ordered freezes on company accounts could further disrupt operations already strained by rising energy debts, equipment disputes, and internal management turmoil.

Several BitRiver data centers have reportedly shut down due to regional crypto mining bans, while many senior executives have exited over the past year. Analysts suggest that a BitRiver collapse could accelerate consolidation within Russia’s crypto mining industry and reshape expectations around electricity demand.

These developments come amid broader pressure on global bitcoin miners following the recent halving event, which cut block rewards in half. Rising power costs and fluctuating bitcoin prices have squeezed profit margins, pushing many mining firms to pivot toward hosting infrastructure for AI and cloud computing as they seek new revenue streams beyond cryptocurrency mining.