Russia's Crypto Mining Giant BitRiver Teeters on the Brink of Bankruptcy

Russia's cryptocurrency mining landscape is facing a seismic shift as BitRiver, the nation's undisputed industry leader, grapples with a cascading series of legal and financial blows that threaten its very survival. The Sverdlovsk Regional Arbitration Court's decision on January 27 to initiate observation proceedings against Fox Group of Companies LLC—the entity controlling 98% of BitRiver—has pushed the mining behemoth to the precipice of bankruptcy.

The immediate trigger is a $9.2 million debt claim filed by Infrastructure of Siberia, a subsidiary of the energy giant En+. The dispute centers on an equipment supply contract where BitRiver allegedly failed to deliver mining hardware after receiving a substantial advance payment exceeding 700 million rubles. Despite BitRiver CEO Igor Runets' public insistence that the equipment was delivered and plans to appeal, enforcement proceedings revealed insufficient assets to cover the court-ordered debt, leading directly to the bankruptcy petition.

This crisis represents a stunning fall for a company that, just last year, reported revenues over $129 million and commanded a network of 15 data centers with a total capacity of 533 MW, powered by more than 175,000 mining rigs. The company's troubles, however, run far deeper than a single contract dispute.

A perfect storm of regulatory crackdowns and internal strife is battering the firm. Key mining sites in the Irkutsk region have been shuttered following local bans, a major 100 MW facility in Buryatia remains uncommissioned, and a 40 MW site in Ingushetia was forcibly closed by authorities. Compounding these operational hurdles are escalating conflicts with energy suppliers over unpaid bills, totaling hundreds of millions of rubles in claimed penalties.

In a dramatic personal twist, BitRiver's founder and public face, Igor Runets, was recently detained and placed under house arrest on charges of tax evasion related to alleged asset concealment. This development further destabilizes the company's leadership amid the crisis.

The company's woes are also inextricably linked to geopolitics. Sanctions imposed by the U.S. Treasury in 2022 over Russia's actions in Ukraine severed BitRiver's access to Western markets and partners, a move followed by the exit of key investor Japanese financial group SBI in 2023.

BitRiver data center equipment in Buryatia. | Source: Tadviser

Paradoxically, as BitRiver stumbles, the demand for mining infrastructure in Russia continues to surge. Data from the System Operator indicates a 33% growth in connected mining and data center capacity in 2025, reaching 4 GW, with market projections suggesting robust annual growth through 2031. BitRiver's potential collapse would leave a massive void in a rapidly expanding market, raising questions about who will fill the power vacuum.

Industry Voices React

Alexei Volkov, Financial Analyst (Moscow): "This is less about one failed contract and more about a systemic failure to adapt. The regulatory environment for mining in Russia has been tightening for years. BitRiver expanded aggressively on old assumptions. Their reliance on specific regional power agreements and inability to navigate the post-sanctions financial landscape created fatal vulnerabilities."

Anya Petrova, Crypto Journalist: "The detention of Runets is the clearest signal yet that the state's tolerance for the 'wild west' era of crypto mining is over. This is about control and taxation. The sector is too large and energy-intensive to operate in a legal gray area. Other major miners will be watching closely and likely accelerating their compliance efforts."

Dmitri Sokolov, Retired Engineer & Mining Enthusiast (Forum Comment): "It's an absolute disgrace! This company was a national champion. Now it's being bled dry by legal battles and government harassment. First, they sanction us, then they ban mining in profitable regions, then they arrest the entrepreneurs. They're strangling the entire industry. Where is the support for Russian tech?"

Ksenia Ivanova, Risk Consultant: "The domino effect here is significant. BitRiver's bankruptcy would not only wipe out a major market player but also trigger defaults on massive energy contracts and unsettle the entire supply chain for mining hardware in Siberia. Creditors, from energy suppliers to equipment vendors, are in for a rocky ride. This will tighten credit for the entire sector."

Source: Adapted from original reporting by Anas Hassan at Cryptonews.com