Russia calls for bankruptcy proceedings against Bitriver subsidiary - Coinfea

The tax authority in Russia has now called for bankruptcy proceedings against a BitRiver subsidiary responsible for the unsuccessful project, which is believed to have led to the downfall of the mining firm. The bankruptcy proceedings have been initiated in the Republic of Buryatia, which hosts the data center built by the company.

According to reports, since the 100 MW data center has been built in Buryatia, it has never been powered on amid restrictions on mining and growing debt. Now, the Federal Tax Service of Russia, FNS, has filed a bankruptcy petition against the BitRiver entity in the Arbitration Court of the Republic of Buryatia, according to reports from several local media.

Russia files bankruptcy petition against BitRiver subsidiary

According to several inside sources, the company’s failed multimillion-dollar investment in the region is at the heart of the case. Some believe it is that mistake that has led to the company’s financial strains and subsequent problems with the state, which includes the arrest of its CEO. According to a news outlet, the project to construct the 100 MW data processing center 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 project, which was initiated by BitRiver founder and chief executive Igor Runets. 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 that part of Siberia. In the spring of 2025, the DPC was reportedly ready to commence operations 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. 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. 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. In addition, a tax-dodging scheme was allegedly being run by several mining firms in the country.