Founder of Russia’s largest crypto mining operation transferred to a detention center

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, according to 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, according to 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.