Blum Co-Founder Arrested Over $15M Crypto Fraud Probe

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Blum Co-Founder Arrested in Russia Over $15 Million Crypto Fraud Probe

Written by Aaron S.,

Editor-In-Chief

Last Updated: May 19, 2025

Key Takeaways

Vladimir Smerkis, co-founder of Blum, was arrested in Moscow on suspicion of large-scale crypto fraud;
The case may involve $15 million in investor losses from two older crypto projects he co-launched in 2017;
Blum confirmed Smerkis has left the company and said its Telegram-based platform remains fully operational.

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Blum Co-Founder Arrested in Russia Over $15 Million Crypto Fraud Probe

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The Telegram-based crypto platform Blum's co-founder, Vladimir Smerkis, has been arrested in Moscow due to a fraud investigation.

On May 18, Russia’s Zamoskvoretsky District Court approved a request to keep him in custody while the case is under review.

State news agency TASS reported that the arrest relates to suspected large-scale fraud under Article 159 of the country’s criminal code, which could carry a prison sentence of two to twelve years.

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According to Russian outlet Mash, the investigation may be tied to earlier crypto projects Smerkis helped launch, The Token Fund and Tokenbox, both founded in 2017. Reports claim that investors in those projects may have lost a total of around $15 million. However, these projects are not connected to Blum.

In a May 18 post on X, Blum stated that Smerkis had stepped down from his role as chief marketing officer and is no longer part of the team. The company also said that its work will continue without disruption and that it remains focused on its original goals.

Blum is a crypto project built inside Telegram’s Mini Apps. It allows users to trade tokens, earn rewards, and join airdrop campaigns without leaving the app. The company said these services are unaffected by the ongoing investigation and that Smerkis had no role in the older projects.

On May 13, the former CEO and CFO of Cred, a collapsed crypto lending firm, pleaded guilty to wire fraud. What did the plea deals reveal? Read the full story.