Russian tax authorities are currently filing for bankruptcy of the BitRiver subsidiary responsible for the massive and failed project that is believed to have led to the collapse of the troubled mining giant.
Bankruptcy proceedings have begun in the Republic of Buryatia, where a 100MW data center built by the company has never been turned on due to mining restrictions and mounting debt.
BitRiver faces bankruptcy proceedings in Buryatia
The Russian Federal Tax Service FNS has filed for bankruptcy with the Arbitration Court of the Republic of Buryatia against the BitRiver-B entity, which is part of the cryptocurrency mining group BitRiver, media reports revealed.
At the heart of the case is a multimillion-dollar investment failure by the region’s mining giants. Some say the mistake led to the company’s financial woes and subsequent problems with the state, including the recent arrest of its CEO.
According to regional news outlet Number One, which first discovered the court filing, the project to build a 100-megawatt data processing center (DPC) in the Mukhorsibirsk district of the Far Eastern territory was first announced in 2020.
The local subsidiary, established in the regional administrative center of Mukorsibir with a registered capital of 100,000 rubles, was created to carry out an ambitious project initiated by BitRiver founder and CEO Igor Runets himself.
Construction was scheduled to begin in 2022 and launch in late 2024, but that never happened. According to business news portal RBC, BitRiver has invested 1.4 billion rubles (more than $18 million) in the facility by February 2024.
The site was intended to house powerful equipment for big data processing, digital currency mining and cloud computing, and was expected to create 100 jobs in the region. However, the realization of this project coincided with the expansion of restrictions on coinage in this part of Siberia.
In the spring of 2025, DPC was reportedly ready to begin operations, but was repurposed as a facility to serve the needs of artificial intelligence (AI) applications. In January 2026, Russian authorities imposed a complete ban on Bitcoin mining in Buryatia for the next five years.
The cause of BitRiver’s problems is said to be a mining project failure.
People familiar with the developments say the failure of the data center project in Buryatia has dealt a major blow to the Russian mining giant.
The group never recovered and was eventually forced to halt mining operations elsewhere, RBC reported.
It comes amid mass employee departures and an increase in lawsuits brought against the entities by contractors and energy suppliers.
BitRiver was founded in 2017 and has since become the operator of Russia’s largest cryptocurrency mining farm and the country’s largest importer of mining hardware.
Founder Igor Runets was charged with tax evasion in late January and was detained and placed under house arrest. One of the demands of Russian prosecutors was that his company pay him a fair salary.
In the weeks that followed, Russian media detailed the alleged tax avoidance scheme carried out by the country’s mining companies.
Commenting on the BitRiver incident, Nikolai Shulginov, chairman of the parliamentary energy committee, accused Russian miners of officially using the same equipment to provide other services that require computing devices and hiding crypto-related income.
Russia legalized the minting of digital coins in 2024, requiring those engaged in the activity to register with the FNS and pay taxes. But only a third of known mining operations have ever done this, according to government estimates.
In the same year, BitRiver’s revenue exceeded 10 billion rubles (approximately $130 million), propelling the group to the top of the ranking of Russian mining companies in 2025, ahead of Intellion Data, which recently secured Russia’s first loan with cryptocurrency as collateral.
