Vladimir Smerkis, co-founder of the Telegram-based crypto project Blum, was arrested in Moscow on May 18. A Moscow court approved investigators’ request to keep him in custody.
He faces allegations of large-scale fraud under Article 159 of Russia’s Criminal Code. The charges relate to his work on earlier ventures. It is unclear if formal charges have been filed. Authorities say he misled investors and caused millions in losses.
Court Orders Pretrial Detention
The Zamoskvoretsky District Court of Moscow decided that Smerkis must remain in custody. Investigators asked the court to hold him while they look into the case.
State-owned media outlet TASS reported that keeping him detained is crucial as the probe continues. Pretrial detention can last until the case moves forward or a trial date is set.
Fraud Allegations and Legal Code
Smerkis is accused of large-scale fraud under Article 159 of Russia’s Criminal Code. Violations of this law can lead to prison sentences between two to twelve years.
Prosecutors say he used his positions to deceive investors in crypto projects. They are still gathering evidence to determine the full scope of losses and who else might be involved.
Past Roles and Ventures Under Scrutiny
Before co-founding Blum, Smerkis led Binance operations in Russia. He also helped start The Token Fund and Tokenbox crypto platforms in 2017. Russian news outlet Mash linked the fraud claims to these earlier ventures.
Investors in those projects reportedly lost about $15 million in total. Investigators suspect that Smerkis used funds improperly and misrepresented project details to attract users.
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Blum Cuts Ties
Blum, the Telegram-based crypto project, confirmed that Smerkis stepped down as chief marketing officer. In a statement shared on the social media platform X(Twitter), the project said it no longer has any role in their operations.
Blum stressed that Smerkis’s arrest is unrelated to their activities. They assured users that day-to-day functions will continue without interruption. Their trading, reward systems, and token airdrops remain active despite the news.
Community Concerns Over Token Airdrop
News of the arrest sparked uncertainty among Blum’s user community. Many members had been eagerly awaiting the planned BLUM token airdrop. The project had said users could join in the third quarter of 2025 by playing the “Drop Game” and earning points.
Now, some users doubt whether the airdrop will happen at all. Crypto influencer RK Gupta voiced the frustration, saying, “No airdrop. No updates. Just silence. Was it all for nothing?” The lack of clear communication has left many feeling uneasy.
Impact on Crypto Projects in Russia
This arrest highlights growing scrutiny of crypto leaders in Russia. Regulators and law enforcement have become more vigilant as digital assets gain popularity.
High-profile figures face closer examination, especially when large sums of money are involved. Smerkis’s case may set a precedent for how authorities treat alleged financial crimes in the crypto sector. Observers are watching to see whether other executives will face similar probes.
Uncertain Legal Outcome
At this point, it is not known if formal charges have been filed against Smerkis. Prosecutors must present evidence in court before moving to trial.
He could face significant prison time if found guilty under Article 159. His legal team may challenge the detention order or seek bail. But for now, he remains behind bars as the investigation continues.
The Smerkis case serves as a warning for anyone involved in cryptocurrency projects. Users should research the founders and teams behind new platforms. Blind trust in marketing claims can lead to heavy financial losses. It is safer to use well-known, regulated exchanges and wallets.
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