Russia arrests Blum co-founder Vladimir Smerkis on fraud charges

Vladimir Smerkis, a co-founder of the Telegram-based crypto project Blum, has reportedly been arrested in Moscow, Russia, on fraud allegations, amid Blum confirming he is no longer affiliated with the project.

The Zamoskvoretsky District Court of Moscow approved a request from investigators to keep Smerkis in custody while he is being investigated, Russian state-owned news outlet TASS reported on May 18.

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.

Russian news outlet Mash tied the fraud allegations against Smerkis to his involvement in The Token Fund and Tokenbox crypto ventures that he co-founded in 2017, where investors reportedly suffered combined losses of around $15 million.

Blum, which is not involved in The Token Fund and Tokenbox ventures, wrote to X on May 18 that Smerkis resigned from his role as the firm’s chief marketing officer and would no longer be involved in the project in any capacity.

Blum said its team remains fully committed and focused on its goals and that its day-to-day operations would continue as usual.

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 incident 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 users could receive BLUM tokens by earning Blum points in its newly launched Drop Game, where users tap on snowflakes falling from their mobile phone screen, and convert those points into tokens during the project’s slated token generation event.

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However, the news of Smerkis’ arrest appears to have shaken community confidence that the BLUM token airdrop will happen.

“Blum owes its users a clarification on the planned airdrop,” one X user and Blum community member said, while crypto influencer RK Gupta added:

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