BitRiver, Russia's largest Bitcoin mining facility, is facing growing legal restrictions. financial crisis This study now sheds new light on the potential structural risks of the country's industrial crypto mining sector. The consequences of huge debts, alleged tax violations, and a poorly regulated market were revealed through bankruptcy scrutiny of Fox Group LLC, the company that controls BitRiver, and criminal charges against its founder, Igor Runets.
Following repeated requests by Infrastructure of Siberia, a subsidiary of the energy and metals group En+, it has applied to the Sverdlovsky Regional Arbitration Court to introduce observation procedures against the Fox Group. This announcement indicates that the court believes there was an early warning of bankruptcy and facilitated formal control of the company's financial operations. According to court documents, Infrastructure of Siberia is seeking a total of approximately $9.2 million from its creditors, consisting of principal debt, penalties for late delivery of equipment, and legal costs, all of which are understood to be third-priority claims.
The cause of this dispute is thought to be the breakdown of the equipment supply contract. Siberian Infrastructure had made an advance payment of more than 700 million rubles to Fox Group under a contract to deliver mining-related hardware. The equipment was never endorsed, the contract was terminated, and a lawsuit was filed to recover the penalty. In April, a court ruled in favor of the energy subsidiary, but enforcement efforts were halted after Fox Group was unable to raise funds to match the judgment, resulting in its bankruptcy filing.
Meanwhile, BitRiver's internal processes are deteriorating. Former and current employees say their salaries have been unpaid for more than three months, and management has not given them any explanation on how to address these delays or give them any deadlines. Several offices were also closed, and company documents, accounting records, and company seals were moved to unknown locations off-site. Employees report that top staff and owners are largely unresponsive and there is an information vacuum.
Tax evasion and increased legal burden
The financial crisis was further fueled by the fact that a Moscow court placed BitRiver founder Igor Runets under house arrest. Investigators allege he hid funds that should have been used to pay taxes, further undermining confidence that the company could stabilize. The charges relate to a major tax investigation. bit river Payments for mining infrastructure were reportedly hidden as normal business expenses.
Legal experts with knowledge of the incident said tax authorities began investigating BitRiver over the alleged monthly payments made to BitRiver by for-profit companies that allegedly paid for BitRiver's services. In at least one case, the payment company audited by the auditor was a traditional manufacturing company with no clear internal requirements for high-performance computing or data processing services.
The researchers found that the payments applied to compensate for power usage and mining infrastructure, rather than actual computer activity. From a tax perspective, the mining output should have been recorded as revenue in such a transaction, and taxes should have been paid. Rather, the expenses were offset and the tax base was reduced. When asked to explain what services it provides, BitRiver reportedly gave vague answers without directly mentioning mining or specialized equipment, making the audit process difficult.
Experts say such structures are common and that large sums of money may have been transferred through BitRiver's infrastructure without proper tax reporting. They say this trend likely triggered increased investigations by federal tax authorities, which ultimately led to criminal charges against company management.
Industry uncertainty and the road to bankruptcy
The BitRiver crisis comes against the backdrop of tighter regulations and local bans on cryptocurrency mining in Russia. Despite the ambiguity surrounding mining at the federal level, some regions have banned mining (partially or completely) due to energy restrictions. In Irkutsk, BitRiver sites in some regions were closed as a result of local bans, and a 100MW data center in Buryatia remained unopened. Authorities have already declared a year-round ban on mining in the area starting in 2026.
Sites that remained functional after being restricted are also targeted by law enforcement. In early 2025, authorities shut down a 40-megawatt facility associated with the Ingushetia-based BitRiver network. This was because mining was prohibited. Even partnerships with major energy companies have collapsed, with joint projects based in Gazprom-Neft being shut down due to contract cancellations. Each shutdown negatively impacted BitRiver's ability to operate and increased financial pressure.
Analysts say regulatory pressure doesn't fully explain the company's collapse. The effectiveness of sanctions and taxation was further exacerbated by concerns about corporate governance, high reliance on advance payments, and vulnerability to energy conflicts. The court appears to have imposed a surveillance procedure, meaning Fox Group was unable to negotiate a debt restructuring and bridging loan in time.
The temporary administrator oversees important transactions, creates a list of creditor claims, and supervises the finances of the monitored company to eliminate asset stripping. Insolvency experts say competing claims from other creditors, such as energy suppliers or taxing governments, typically speed up the process. According to the BitRiver case, the company reportedly owes energy companies hundreds of millions of rubles, and some of its accounts have been frozen.
Lunette's imprisonment made matters worse. Legal experts argue that founders have a central role in negotiations with creditors and other potential investors, especially in tight-knit groups. Under house arrest, Runets has little ability to organize rescue efforts, contribute personal funds, or react quickly to events. The very nature of taxes means that there is an unpaid debt that usually has priority in the event of bankruptcy.
Unless a strategic investor comes along to take on the debt and finance the settlement, legal analysts predict that bankruptcy proceedings will spread to other BitRiver Network members outside of Fox Group. Dozens of related companies are also said to be tied together by a common infrastructure and financing structure, increasing the likelihood of a domino-like default.
