Russia's tax agency files bankruptcy process for BitRiver subsidiary

Russia’s tax authority is now applying for the bankruptcy of a BitRiver subsidiary responsible for a massive and unsuccessful project believed to have led to the downfall of the troubled mining giant.

The bankruptcy proceedings have been initiated in the Republic of Buryatia, which is hosting a 100 MW data center built by the company, but it has never been powered on amid restrictions on mining and growing debt.

BitRiver company faces bankruptcy procedures in Buryatia

The Federal Tax Service of Russia, FNS, has filed a bankruptcy petition against the BitRiver-B entity, part of the crypto mining group BitRiver, in the Arbitration Court of the Republic of Buryatia, media reports unveiled.

A failed multimillion-dollar investment of the mining behemoth in the region is at the heart of the case. Some say it is the mistake that led to the company’s financial strains and subsequent problems with the state, including the recent arrest of its CEO.

According to the regional news outlet “Number One,” which first spotted the court filing, the project to construct the 100 MW data processing center (DPC) in the Mukhorshibirsky District of the Far Eastern territory was first announced in 2020.

The local subsidiary, incorporated in the rural administrative center Mukhorshibir with a registered capital of 100,000 rubles, was established to implement the ambitious project, initiated by BitRiver founder and chief executive Igor Runets himself.

Construction began in 2022, with a planned launch in the second half of 2024 that never materialized. By February 2024, BitRiver had invested 1.4 billion rubles (over $18 million) in the facility, according to the business news portal RBC.

The site was intended to house powerful equipment for big data processing, digital currency mining, and cloud computing, and was supposed to create 100 jobs in the area. However, the project’s realization coincided with expanding restrictions on coin minting in this part of Siberia.

In the spring of 2025, the DPC was reportedly ready to commence operations but as a facility repurposed to serve the needs of artificial intelligence (AI) applications. In January of 2026, Russian authorities imposed a full ban on Bitcoin mining in Buryatia for the next five years.

Failed mining project blamed for BitRiver’s troubles

Sources familiar with these developments claim the failure of the data center project in Buryatia dealt a major blow to the Russian mining giant.

Quoted by RBC, they said the group could never recover and was eventually forced to halt mining operations at other places as well.

That happened amid mass employee departures and mounting lawsuits filed by contractors and energy suppliers against its entities.

BitRiver was established in 2017 and has since become Russia’s largest operator of crypto mining farms and the country’s leading importer of mining hardware.

Founder Igor Runets was accused of tax evasion at the end of January, detained and placed under house arrest. One of the demands of Russian prosecutors was that his firms pay due salaries.

Russian media reports in the following weeks detailed a tax-dodging scheme allegedly implemented by mining enterprises in the country.

Commenting on the BitRiver case, the chairman of the parliamentary Energy Committee, Nikolai Shulginov, accused Russian miners of hiding crypto-related income by officially using the same equipment to provide other services that need computing devices.

Russia legalized the minting of digital coins in 2024, requiring those engaged in the activity to register with the FNS and pay due taxes. However, only a third of known mining businesses have done that so far, according to government estimates.

BitRiver’s revenue for that year exceeded 10 billion rubles (about $130 million), helping the group top Russian rankings of mining companies in 2025, ahead of Intelion Data, which recently secured Russia’s first loan using cryptocurrency as collateral.

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