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BTC Pulse 2025-05-18 19:06:24

Russian Court Detains Former Binance Executive and Blum Co-Founder on Fraud Charges

Russian Court Detains Former Binance Executive and Blum Co-Founder on Fraud Charges

Russian Authorities Arrest Blum Co-Founder in Criminal Fraud Case Russian authorities have arrested Vladimir Smerkis, a co-founder of the tap-to-earn cryptocurrency app Blum and ex-regional head at Binance, in relation to a criminal fraud case. The Moscow Zamoskvoretsky District Court approved a request by investigators to place Smerkis under arrest, according to state news agency TASS. He is under investigation by Article 159 of the Russian Criminal Code, which pertains to fraud. The type of charges remains unspecified and thus subject to speculation within both legal and crypto circles. The arrest was formally sanctioned by the court, showing that prosecutors believe that there is sufficient initial evidence to support detention. Smerkis has not issued a statement on the case in the public sphere. Sudden Departure from Blum One day prior to news of the arrest, Blum shared on social media that Smerkis had officially resigned as co-founder and Chief Marketing Officer. “Smerkis no longer involves in the project development or any co-founder position,” the company posted on X (formerly Twitter). The company posted a second statement, thanking him for the work done on the project and reassuring users that its everyday business and development would go on as normal. The timing of the announcement having been made at this point, shortly prior to his arrest, is what brought eyebrows in terms of whether the two incidents are connected or the company had prior knowledge of the probe. What Is Blum? Blum is a Telegram-integrated tap-to-earn (T2E) crypto mini-app that combines gamified earning mechanics with decentralized exchange (DEX) functionality. Created by a team that includes several former Binance executives, Blum seeks to make crypto trading easier and more fun for new and younger consumers. The app is founded on the concept of earning cryptocurrency via meaningful activities and aspires to bring forth a middle ground between casual use of cryptocurrency and higher-level trading. Legal Issues Cast Shadow The arrest of Smerkis is extremely troubling to the Blum project and its backers, even though the company has attempted to distance itself from it. Article 159 of the Russian Criminal Code, on which Smerkis is being charged, relates to grand fraud and carries the weight of severe punishment. The generality of information regarding the charges does raise doubts as to whether charges relate to his activity at Blum, Binance, or other commercial undertakings. So far, neither the Russian authorities nor Blum representatives have issued additional statements. The crypto community is watching to see what comes next regarding a case that could have additional ramifications for Russian-based high-level crypto business leaders.

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