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

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

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 TASS on Thursday, May 18.

The report says that the Zamoskvoretsky District Court of Moscow granted a request from investigators to keep Smerkis in custody while he is being investigated.

Smerkis, the former Binance Russia manager, is suspected of committing fraud on a “large scale,” which is an offense defined by Article 159 of the Criminal Code of the Russian Federation. Violations of this article can lead to imprisonment terms ranging from two to 12 years.

It's important to note that the nature of the fraud allegations and whether any charges have been filed against Smerkis remain unclear at this time.

According to a report by Russian news outlet Mash, the fraud allegations might be linked to Smerkis's involvement in two other crypto ventures, The Token Fund and Tokenbox, which he co-founded in 2017.

According to Mash, investors in these ventures reportedly suffered combined losses of about $15 million. However, Blum is not involved in either The Token Fund or Tokenbox.

In a post on X, formerly Twitter, Blum confirmed that Smerkis has resigned from his role as the firm's chief marketing officer and will no longer be part of the project in any capacity.

Despite this development, Blum stated that its team remains fully committed and focused on its goals, and the day-to-day operations will continue as usual.

Blum is a crypto project that integrates a decentralized exchange into Telegram Mini Apps, allowing users to engage in crypto trading, earn rewards, and participate in token airdrops. The project recently launched its Drop Game, a unique initiative designed to distribute its native BLUM tokens to users.

In the Drop Game, users collect Blum points by tapping on snowflakes that fall from their mobile phone screen. These points can later be converted into BLUM tokens during a planned token generation event.

Earlier this year, Blum teased the possibility of listing its token in the third quarter of 2023. However, the news of Smerkis's arrest and the subsequent developments have sparked concerns among community members.

"Blum owes its users a clarification on the planned airdrop," wrote one X user and Blum community member in response to a post by crypto influencer RK Gupta.