Blum Co-Founder Vladimir Smerkis Arrested for Crypto Fraud in Russia

Vladimir Smerkis, co-founder of the Telegram-based crypto project Blum and former head of Binance operations in Russia, has been arrested by Russian authorities on charges of large-scale financial fraud.

A court in Moscow approved his detention under Article 159 of the Russian Criminal Code, which deals with serious financial crimes. If found guilty, Smerkis could face between two and twelve years in prison.

The case is linked to Smerkis’s earlier crypto ventures — The Token Fund and Tokenbox — launched in 2017 during the initial coin offering (ICO) boom. These platforms are no longer active. Authorities say investors lost around $15 million and allege that the projects were poorly managed and lacked proper regulation.

Smerkis is a well-known name in the crypto world. Before starting Blum, he was the director of Binance Russia. His arrest has surprised many in the Web3 and crypto communities, especially because Blum has been gaining popularity as a Telegram mini-app with a “tap-to-earn” feature. Inspired by the success of Hamster Kombat in 2024, Blum has attracted hundreds of thousands of daily users.

Following the arrest, Blum released an official statement on May 18, confirming that Smerkis had resigned as Chief Marketing Officer and is no longer part of the team. The company assured users that its operations remain unaffected and that it is committed to transparency and user trust.

“Blum remains focused on building an innovative and engaging experience for our community,” the company said. It also confirmed that the planned BLUM token airdrop in the third quarter of 2025 will go ahead as scheduled.

The company added that it is reviewing its security and compliance measures to avoid similar issues in the future.

While the legal case is focused on old projects, the arrest has raised concerns about how much background checking is done on leaders in the crypto space. It also highlights ongoing trust and regulation issues in the industry.

As the case develops, more details are expected from Russian officials and affected investors. Many in the crypto world will be closely watching how this situation affects not only Blum but also other Telegram-based and Web3 projects.