Blum Co-Founder Arrested On Fraud Charges In Moscow

The arrest stems from fraud allegations that date back to Vladimir’s earlier crypto ventures. Meanwhile, Blum has also confirmed that Smerkis is no longer affiliated with the project in any capacity.

Moscow Court Approves Custody Over Fraud Allegations

On May 18th, the Zamoskvoretsky District Court in Moscow approved a petition from investigators to detain Vladimir Smerkis while an investigation into the allegations proceeds. The news was reported by TASS, a major Russian state-owned media outlet.

Source: X (@blumcrypto)

Smerkis is under investigation for suspected large-scale fraud, which falls under Article 159 of the Criminal Code of the Russian Federation. This charge carries significant weight in Russian law, with penalties ranging from two to 12 years of imprisonment if convicted.

At this point, it remains unclear whether formal charges have been officially filed against him. However, the court’s decision to approve his detention suggests that authorities consider the case to be serious.

Alleged Ties To Past Crypto Ventures Surface

Although Smerkis was a prominent figure at Blum until recently, the current fraud investigation reportedly ties back to earlier projects. Russian news outlet Mash linked the allegations to Smerkis’ involvement in The Token Fund and Tokenbox, two cryptocurrency investment platforms he co-founded in 2017.

According to Mash, investors in those projects suffered collective losses of approximately $15 million. These platforms were among the early entrants in the crypto investment fund space but eventually faced scrutiny over transparency and fund management.

Blum has publicly distanced itself from these ventures and emphasized that it was not involved in The Token Fund or Tokenbox. The team has made it clear that these issues are unrelated to their current operations.

Blum Confirms Smerkis’ Resignation

Shortly after news of the arrest broke, Blum took to social media platform X on May 18th to issue a public statement. The company confirmed that Vladimir Smerkis had resigned from his role as Chief Marketing Officer and would no longer be associated with the project in any capacity.

In its official statement, Blum reassured users and investors that the project remains stable:

“Our team remains fully focused and committed to our mission. Day-to-day operations are continuing without disruption.”

Will The BLUM Token Airdrop Still Happen?

Smerkis’ arrest has sparked concerns within the Blum community, especially regarding the highly anticipated BLUM token airdrop. The project had teased the upcoming launch of its native token in an April 3rd post on X, hinting at a third-quarter token listing.

Blum had introduced an interactive feature called the Drop Game, where users earn “Blum Points” by tapping falling snowflakes on their mobile screens. These points are expected to be convertible into BLUM tokens during the project’s TGE.

But the recent news has unsettled the community. Users are beginning to question whether the airdrop will proceed as originally planned.

Community Voices Frustration Over Uncertainty

Following Smerkis’ detainment, several users took to social media to express concerns about the project’s future. One X user, who identifies as a long-time community member, wrote:

“Blum owes its users a clarification on the planned airdrop. We’ve invested time and energy.”

Source: X (@earnwithrk)

The absence of immediate communication from the team regarding the token launch has led to speculation about potential delays, or even a full cancellation, of the airdrop.

Blum Faces Critical Juncture Amid Legal Uncertainty

As the legal proceedings against Vladimir Smerkis unfold, the Blum project finds itself at a crucial crossroads. While the team has reiterated that operations are continuing normally, investor confidence has clearly taken a hit.

Given the scale of the fraud allegations, especially the reference to a multi-million-dollar loss in earlier ventures, Blum must now work to restore transparency and trust. Whether the team can successfully distance the project from Smerkis and deliver on its roadmap remains to be seen.

For now, the crypto community is watching closely. All eyes are on Blum as it navigates the turbulence brought on by the arrest of one of its co-founders.