Vladimir Smerkis, co-founder of the Telegram-based cryptocurrency project Blum, has been arrested in Moscow on fraud allegations, according to Russian state media, while the company confirmed he's no longer affiliated with the project.
The Zamoskvoretsky District Court of Moscow approved investigators' request to keep Smerkis in custody during the investigation, Russian state-owned news outlet TASS reported Saturday. Smerkis, who previously operated Binance in Russia, faces potential fraud charges considered "large scale" under Article 159 of Russia's Criminal Code, which carries imprisonment ranging from two to 12 years.
What to Know:
- The fraud allegations against Smerkis reportedly relate to his earlier crypto ventures, not the current Blum project
- Investors in Smerkis' previous crypto projects The Token Fund and Tokenbox allegedly lost around $15 million
- The arrest has sparked concerns about Blum's promised token airdrop planned for Q3 2025
Investigation Focuses on Previous Ventures
It remains unclear whether formal charges have been filed against Smerkis. Russian news outlet Mash connected the fraud allegations to Smerkis' involvement in The Token Fund and Tokenbox, cryptocurrency ventures he co-founded in 2017. Investors in these projects reportedly suffered combined losses of approximately $15 million.
Blum, which is not implicated in The Token Fund and Tokenbox ventures, announced on its X (formerly Twitter) account Saturday that Smerkis had resigned from his role as the company's chief marketing officer and would no longer be involved with the project in any capacity.
"Our team remains fully committed and focused on our goals," Blum stated. "Day-to-day operations will continue as usual." The cryptocurrency project's statement attempted to distance itself from its former co-founder following the arrest. Smerkis, who helped launch Blum alongside former Binance executive Gleb Kostarev, played a significant role in the platform's development and marketing prior to his departure.
Community Questions Token Airdrop Plans
The incident has triggered widespread concern among users about whether Blum's planned token airdrop will proceed as scheduled. In an April 3 post on X, Blum had suggested a potential BLUM token listing would occur in the third quarter of this year.
Users have been accumulating Blum points through the platform's Drop Game, where participants tap on digital snowflakes falling across their mobile phone screens. These points were intended to be converted into tokens during the project's token generation event.
Following news of Smerkis' arrest, community confidence in the airdrop appears shaken. "Blum owes its users a clarification on the planned airdrop," wrote one X user and Blum community member. Crypto influencer RK Gupta added: "No airdrop. No updates. Just silence. Was it all for nothing?"
How Blum's Hybrid Exchange Functions
Blum operates as a hybrid cryptocurrency exchange built into Telegram's Mini Apps ecosystem, combining elements of both centralized and decentralized exchanges. The platform utilizes an off-chain order book with on-chain settlements, offering users either self-custody or multi-party computation wallet options.
The system automatically lists tokens with sufficient liquidity from various exchanges and protocols, providing access across more than 30 blockchain networks including Ethereum, Solana, Binance Smart Chain, and TON.
Users can trade directly within Telegram through a mobile-first interface with integrated gamified elements.
Blum's core functionality includes cryptocurrency trading capabilities, simplified derivatives trading including perpetual futures and options, and peer-to-peer fiat transactions with a focus on local currencies. The platform emphasizes accessibility for emerging markets where local cryptocurrency products are often underdeveloped.
The Blum Points system rewards user engagement through daily tasks, the Drop Game, and referrals. Users typically earn points by clicking a "farm" button within the mini-app and claiming accumulated points every eight hours. Points can be boosted through community engagement and referring friends, with each user potentially earning 10% of their referrals' accumulated points.
Uncertain Future
The arrest of Smerkis creates significant uncertainty for Blum and its users at a critical growth stage. Despite reaching a reported 65 million users according to company statements, the platform now faces questions about its leadership, planned token distribution, and long-term viability.
While Blum insists operations will continue normally, users across social media platforms have expressed skepticism about the project's future without one of its founding members. The cryptocurrency community will be watching closely to see if the company follows through on its token distribution plans in the coming months.