Russian Court Orders Detention of Crypto Game Co-Founder on Fraud Charges

Russian law enforcement has arrested the co-founder of the crypto game Blum in Moscow as part of a criminal investigation into large-scale fraud.

Smerkis Steps Down as Blum CMO

Russian law enforcement arrested Vladimir Smerkis, co-founder of the crypto game Blum, in Moscow as part of a criminal investigation into large-scale fraud. The announcement of his arrest came a day after Blum said Smerkis would step down as chief marketing officer (CMO) and end his involvement in the project.

According to TASS, the arrest followed a decision by the Zamoskvoretsky District Court granting a petition for Smerkis’ detention.

“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 source within the agency said.

While the court’s website confirmed receipt of materials related to Smerkis’ arrest, it did not specify its decision on the matter, TASS reported.

Meanwhile, a separate report suggested Smerkis’ arrest may be linked to previous cryptocurrency ventures in which investors allegedly lost at least $15 million. In 2017, Smerkis, a former head of Binance in the CIS, reportedly founded The Token Fond, a cryptocurrency investment fund that raised $8 million before abruptly ceasing operations a year later.

Another venture linked to Smerkis, Tokenbox, reportedly raised $7 million in investments. The project’s TBX token, listed on two exchanges, allegedly experienced rapid depreciation before disappearing.