Igor Runets, founder of Russia's largest crypto mining company BitRiver, was moved from house arrest to pretrial detention on July 29. The Moscow court ruled that Runets must stay in custody for at least two months as investigators deepen their probe into allegations of large-scale fraud involving prepaid mining equipment that was never delivered.

Details of the Fraud Allegations

Russian prosecutors accuse Runets of causing nearly 1 billion rubles, equivalent to roughly $12.5 million, in damages to En+, a major energy and metals conglomerate. The case revolves around a contract where a company controlled by Runets received full payment upfront for crypto mining gear but failed to supply the machines or refund the funds. This breach triggered charges under Part 4 of Article 159 of Russia’s Criminal Code, which deals with fraud on a large scale, allegedly orchestrated by an organized group.

The BitRiver parent company, Fox Group, has also entered bankruptcy monitoring due to debts around $9.2 million, adding financial pressure amid the ongoing legal battle. Authorities justified the stricter detention by citing risks that Runets could interfere with witnesses if left under house arrest. The investigation continues, focusing on equipment inspections and testimony from En+ representatives to build the case.

Reactions and Next Steps in the Investigation

So far, neither BitRiver nor Runets’s legal team have made public statements responding to the court’s decision. The absence of any comment leaves the company’s stance unclear while the case unfolds. Runets’s detention follows previous arrests earlier this year, signaling intensifying legal troubles linked to the crypto mining sector in Russia.

The court’s decision to tighten custody reflects the seriousness of the accusations and the substantial sums involved. As the investigation progresses, it could have wider implications for the Russian crypto mining industry, which has faced increasing scrutiny amid financial and regulatory challenges.

This article is for informational purposes and does not constitute financial advice.