A Moscow court has changed the coercive measures against BitRiver founder Igor Runets from home detention to pretrial detention. The company has long been considered one of Russia's largest cryptocurrency mining companies. This escalation further expands the impact of the case on the company's operations and future control.
The amount involved is close to 1 billion rubles.
Prosecutors have charged Runets with "massive fraud" under the Russian criminal code. Investigators say the case caused the Russian energy and metals group En+ to lose nearly 1 billion rubles.
According to the investigation, a company controlled by Runets received full upfront payments for mining equipment from a subsidiary of En+, but the equipment was never delivered and the payments were not refunded. On July 29, the court ordered the company to be detained for at least two months to allow the investigation to continue.
The court accepted the investigation team's application.
Law enforcement requested that Runets be changed from home confinement to detention, citing reasons including the large amount of money involved and the possibility that he could influence witnesses. The court ultimately granted the request.
As of now, lawyers for BitRiver and Runets have not publicly responded to the ruling. Investigators say further developments in the case will depend on the results of device identification and the testimony of En+ witnesses.
This is the second time this year that restrictions have been imposed.
This is not the first time Runets has faced restrictions this year. Russian law enforcement arrested him in February and launched an investigation into him for allegedly concealing assets intended to pay tax debts, placing him under house arrest at the time. The case also involved tax evasion charges.
This criminal case has exacerbated BitRiver's current operational pressures. Reports indicate that Fox Group, BitRiver's parent company, has approximately $9.2 million in debt. After determining it lacked sufficient funds or assets to repay its debts, the company filed for bankruptcy, and its control is facing a change.
