Russian Tax Authority Targets BitRiver as Crypto Mining Project Collapses

Russia's Federal Tax Service has filed a bankruptcy petition against BitRiver cryptocurrency mining group. The action targets issues arising from a large scale data center project in the Republic of Buryatia that failed to become operational. Local courts in the region are now handling the proceedings.

The data center initiative represented a significant investment for the company. It centered on a planned 100 megawatt facility in the Mukhorshibirsky District. Construction work began in 2022 following the initial announcement of the project in 2020.

BitRiver had allocated more than 1.4 billion rubles equivalent to over $18 million dollars by February 2024 for the development. The facility was meant to support data processing activities along with digital currency mining and cloud computing capabilities. Plans included the creation of approximately 100 new jobs in the local area to boost the regional economy.

Regulatory developments in the Siberian territory created substantial obstacles for the project. Restrictions on cryptocurrency mining grew more stringent as construction progressed. These conditions ultimately prevented the data center from launching as scheduled during the second half of 2024.

Challenges Surrounding BitRiver Mining Operations in Russia

BitRiver has operated as a major force in the Russian cryptocurrency sector since its founding in 2017. The company established itself as the largest operator of mining farms in the country and the top importer of specialized hardware. Its revenue surpassed 10 billion rubles or about $130 million dollars in 2024 which placed it at the forefront of national mining rankings throughout 2025.

Local sources indicate that the unsuccessful Buryatia venture played a central role in the groups financial difficulties. The inability to power up the facility contributed to pauses in mining activities at additional locations. Employee departures increased while lawsuits from contractors and energy suppliers accumulated against various company entities.

Founder and chief executive Igor Runets recently came under legal scrutiny. He was placed under house arrest following a court decision on tax evasion related charges. Prosecutors have called for BitRiver entities to settle unpaid salaries as part of the ongoing case.

Parliamentary leaders have commented on practices within the mining industry. The chairman of the Energy Committee Nikolai Shulginov highlighted how some operations may report computing equipment usage for non mining services to manage tax responsibilities. Russia introduced legalization of digital crypto mining in 2024 requiring registration with tax authorities and payment of applicable fees.

Current estimates suggest that only one third of known mining businesses have completed the necessary registration process. The BitRiver situation brings attention to the compliance demands placed on miners in this space. The company attempted to adapt the Buryatia site for artificial intelligence applications by the spring of 2025.

Russian officials enacted a full ban on Bitcoin mining within Buryatia in January 2026. This measure extends for the next five years and affects potential uses of the completed infrastructure. BitRiver continues to appeal these regulatory and financial issues as the bankruptcy petition advances through the courts.