Vladimir Smerkis, co-founder of Telegram-based crypto project Blum, arrested in Moscow on fraud allegations

Vladimir Smerkis, a co-founder of the Telegram-based crypto project Blum, has reportedly been arrested in Moscow, Russia, on fraud allegations

Vladimir Smerkis, a co-founder of the Telegram-based crypto project Blum, has been arrested in Moscow, Russia, on fraud allegations, according to reports by Russian state-owned news outlet RIA Novosti.

The report by the news outlet, which was later updated to remove any mention of the arrest, stated that the Zamoskvoretsky District Court of Moscow approved a request from investigators to keep Smerkis in custody as he is being investigated.

Smerkis — who previously ran operations for Binance in Russia — is suspected of committing fraud on a “large scale,” pursuant to Article 159 of the Criminal Code of the Russian Federation, violations of which can result in imprisonment ranging from two to 12 years. It isn’t clear if charges have been filed against Smerkis.

The fraud allegations appear to stem from Smerkis’ involvement in two other crypto ventures, The Token Fund and Tokenbox, which he co-founded in 2017, according to Russian news outlet Mash. Citing unnamed sources, Mash reported that investors in those ventures suffered losses of around $15 million in total.

Blum, which is not involved in The Token Fund and Tokenbox ventures, confirmed that Smerkis has resigned from his role as the firm’s chief marketing officer and would no longer be affiliated with the project in any capacity.

“We are fully committed and focused on our goals and day-to-day operations will continue as usual,” Blum wrote in a May 18 X post.

Blum is a crypto project that integrates a decentralized exchange into Telegram Mini Apps, enabling users to trade crypto, earn rewards and participate in token airdrops. The project also launched its Drop Game, in which users can earn Blum points by tapping on snowflakes falling from their mobile phone screen and later convert those points into BLUM tokens during the project’s slated token generation event.

The news of Smerkis’ arrest and pending fraud charges sparked concerns that Blum’s token airdrop won’t follow through as planned. In an April 3 X post, Blum hinted at a potential BLUM token listing in the third quarter of this year.

"Blum owes its users a clarification on the planned airdrop," wrote one X user and Blum community member in response to the news.

"Is the blum token still happening with this news?" asked another user on X.

"This is huge if true! (But) surely not possible," added crypto influencer RK Gupta.