Vladimir Smerkis, co-founder of the Telegram-based cryptocurrency project Blum and former head of Binance’s CIS division, was arrested in Moscow on suspicion of large-scale fraud, Russian state media outlet TASS reports. The Zamoskvoretsky District Court approved his detention as the investigation proceeds under Article 159 of the Russian Criminal Code, which addresses fraud and carries potential prison terms of two to 12 years.
The allegations relate to Smerkis’ previous ventures, The Token Fund and Tokenbox, rather than his work with Blum. These companies, founded in 2017, are accused of causing investor losses totaling around $15 million, sparking speculation about a possible exit scam.
Following the arrest, Blum quickly announced Smerkis’ resignation as Chief Marketing Officer and confirmed he is no longer involved with the project. The team reassured users that daily operations would continue unaffected and reaffirmed their commitment to the project’s roadmap, including plans for a decentralized exchange and reward-based games.
Blum’s community, which grew rapidly amid the 2024 tap-to-earn trend, has expressed mixed reactions. The project’s popular “Drop Game” allowed users to earn points convertible into BLUM tokens, but delays in the token generation event (TGE) and Smerkis’ arrest have raised doubts about the airdrop’s future.
Industry experts emphasize that transparency and regulatory compliance will be crucial for Blum and similar projects to maintain trust and growth in the evolving crypto market.
