Russian tax authorities are at the moment submitting for chapter of the BitRiver subsidiary answerable for the huge and failed undertaking that’s believed to have led to the collapse of the troubled mining big.
Chapter proceedings have begun within the Republic of Buryatia, the place a 100MW knowledge middle constructed by the corporate has by no means been turned on as a consequence of mining restrictions and mounting debt.
BitRiver faces chapter proceedings in Buryatia
The Russian Federal Tax Service FNS has filed for chapter with the Arbitration Court docket of the Republic of Buryatia towards the BitRiver-B entity, which is a part of the cryptocurrency mining group BitRiver, media stories revealed.
On the coronary heart of the case is a multimillion-dollar funding failure by the area's mining giants. Some say the error led to the corporate's monetary woes and subsequent issues with the state, together with the current arrest of its CEO.
In response to regional information outlet Quantity One, which first found the court docket submitting, the undertaking to construct a 100-megawatt knowledge processing middle (DPC) within the Mukhorsibirsk district of the Far Jap territory was first introduced in 2020.
The native subsidiary, established within the regional administrative middle of Mukorsibir with a registered capital of 100,000 rubles, was created to hold out an bold undertaking initiated by BitRiver founder and CEO Igor Runets himself.
Building was scheduled to start in 2022 and launch in late 2024, however that by no means occurred. In response to enterprise information portal RBC, BitRiver has invested 1.4 billion rubles (greater than $18 million) within the facility by February 2024.
The positioning was supposed to deal with highly effective tools for large knowledge processing, digital forex mining and cloud computing, and was anticipated to create 100 jobs within the area. Nonetheless, the conclusion of this undertaking coincided with the growth of restrictions on coinage on this a part of Siberia.
Within the spring of 2025, DPC was reportedly prepared to start operations, however was repurposed as a facility to serve the wants of synthetic intelligence (AI) purposes. In January 2026, Russian authorities imposed an entire ban on Bitcoin mining in Buryatia for the following 5 years.
The reason for BitRiver's issues is claimed to be a mining undertaking failure.
Folks conversant in the developments say the failure of the info middle undertaking in Buryatia has dealt a significant blow to the Russian mining big.
The group by no means recovered and was ultimately pressured to halt mining operations elsewhere, RBC reported.
It comes amid mass worker departures and a rise in lawsuits introduced towards the entities by contractors and power suppliers.
BitRiver was based in 2017 and has since develop into the operator of Russia's largest cryptocurrency mining farm and the nation's largest importer of mining {hardware}.
Founder Igor Runets was charged with tax evasion in late January and was detained and positioned beneath home arrest. One of many calls for of Russian prosecutors was that his firm pay him a good wage.
Within the weeks that adopted, Russian media detailed the alleged tax avoidance scheme carried out by the nation's mining firms.
Commenting on the BitRiver incident, Nikolai Shulginov, chairman of the parliamentary power committee, accused Russian miners of formally utilizing the identical tools to supply different providers that require computing gadgets and hiding crypto-related earnings.
Russia legalized the minting of digital cash in 2024, requiring these engaged within the exercise to register with the FNS and pay taxes. However solely a 3rd of identified mining operations have ever executed this, in line with authorities estimates.
In the identical 12 months, BitRiver's income exceeded 10 billion rubles (roughly $130 million), propelling the group to the highest of the rating of Russian mining firms in 2025, forward of Intellion Information, which not too long ago secured Russia's first mortgage with cryptocurrency as collateral.
