Former Binance Exec and Blum Co-Founder Arrested in Moscow for Alleged Large-Scale Fraud

Vladimir Smerkis, the co-founder of the crypto platform Blum and a former Binance executive, was arrested in Moscow on charges of large-scale fraud. 

“The Zamoskvoretsky District Court granted the investigator’s petition to choose a preventive measure in the form of detention for Vladimir Smerkis, who was detained in connection with a case of fraud on an especially large scale (Article 159 of the Criminal Code of the Russian Federation),” a local media report stated. 

Blum Distances Itself From Co-founder 

While specific details of the charges have not been disclosed, the arrest has sent shockwaves through the cryptocurrency community. However, a report suggests that the arrest could be related to previous projects that Smerkis led. He allegedly created cryptocurrency investment funds, The Token Fund and Tokenbox, which raised millions but have since faded into obscurity. 

Following his arrest, Blum announced on X that Smerkis had resigned from his position as Chief Marketing Officer. They added that he is no longer involved in the project’s development. Furthermore, the project emphasized its commitment to transparency and security, distancing itself from the allegations against its former executive.

Blum Users Express Concern Over Airdrop 

Smerkis is known for his influential role in the crypto space. He previously served as the CIS General Manager at Binance before co-founding Blum in December 2023. Under his leadership, Blum gained attention for its innovative approach to token launches. This included live-streamed events designed to enhance transparency and user engagement.

Blum, initially backed by Binance Labs through its Most Valuable Builder accelerator program, launched its “Drop Game” in May 2024. The game allows users to earn “Blum Points” by tapping snowflakes as they fall across their phone screens.

The project promised an eventual airdrop to convert Blum Points into tokens. However, after delays and the launch of additional airdrop “seasons,” users are still waiting for the token-generation event. With the arrest of Smerkis, users are expressing concerns about the planned airdrop. The airdrop is slated for sometime in the second quarter of 2025, but doubts are growing over whether it will happen.

The arrest comes amid increasing scrutiny of cryptocurrency platforms and executives worldwide. In recent months, authorities have intensified efforts to crack down on fraudulent activities within the crypto industry.