A Russian court has transferred Igor Runets, the founder of the country’s largest cryptocurrency mining company BitRiver, to a pre-trial detention center to stand trial on fraud charges, Pravo.ru reported on Thursday.
Runets is accused of “large-scale” fraud, according to the press service. Investigators say he caused damage exceeding 1 billion rubles ($12.5 million) by failing to deliver equipment to Infrastructure of Siberia, a subsidiary of En+, a multibillion-dollar company that produces 5% of the world’s aluminum and also manages digital infrastructure, technology and crypto-mining 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 arrested and placed under house arrest in February on three counts 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. It later expanded its operations to 15 data centers with more than 175,000 servers.
Following the closure of several of its cryptocurrency mining centers due to a six-year government ban in 10 regions, BitRiver began to face financial problems. A regional arbitration court in February opened insolvency proceedings against its majority shareholder, the Fox group of companies, which owns 98% of BitRiver’s authorized capital.
