Ex-Binance Bigwig Vladimir Smerkis Cuffed in Blum Crypto Fraud Scandal—Just Another Day in Web3 Wonderland

Blum’s co-founder and former Binance exec Vladimir Smerkis faces fraud charges—allegedly running a Ponzi scheme that’d make even Wall Street blush. The arrest comes as regulators globally tighten screws on crypto’s wild west.

Sources claim Smerkis siphoned millions through Blum’s tokenomics, leveraging his Binance pedigree to lure investors. The platform’s native token plummeted 60% post-news—because nothing builds confidence like handcuffs at dawn.

Funny how these ’disruptive innovators’ always seem to rediscover old-school financial crimes. Maybe blockchain’s real innovation is efficiency in grift.

From ICO Scandals to Telegram Games: Blum Cuts Ties with Co-Founder

According to a local publication, the probe apparently focuses on Smerkis’s participation in two cryptocurrency investment platforms started in 2017 during the first coin offering (ICO) frenzy: The Token Fund and Tokenbox. These sites offered easily available access to crypto assets, but finally fell apart, and investment losses were estimated at $15 million.

Russian prosecutors argue the projects were poorly managed and lacked regulatory oversight, suggesting that misleading practices may have been involved. Though these ventures predate Blum, they have raised questions about executive conduct and project accountability within the crypto ecosystem.

Smerkis later became a notable figure in the Web3 space through his role at Binance Russia and, more recently, as co-founder of Blum.

Blum, which initially gained support through Binance Labs’ Most Valuable Builder accelerator program, launched its interactive “Drop Game” in May 2024. The game allowed users to accumulate “Blum Points” by tapping falling snowflakes on their phone screens, with the promise that these points WOULD later convert into tokens through an airdrop.

We would like to inform our community that Vladimir Smerkis has stepped down from his role as CMO and is no longer involved in the development of the project or in any co-founder capacity.

Following the arrest of Vladimir Smerkis, Blum quickly moved to distance the project from its now-former executive. In a statement posted to X on Saturday, Blum announced that Smerkis “…has stepped down from his role as CMO and is no longer involved in the development of the project or in any co-founder capacity.”

Also, the team emphasized that operations continue as planned, including the upcoming BLUM token airdrop scheduled for Q3 2025.

Fraud Charges Mount Against Crypto Executives Worldwide

The recent arrest of Vladimir Smerkis adds to a growing crackdown on crypto executives facing legal consequences for fraud tied to token sales, NFTs, and failed platforms.

In Illinois, Jonathan Mills, the founder of the Hashling NFT project and CEO of Satoshi Labs LLC, is being sued by investors who allege he diverted $1.46 million from joint ventures for personal use.

Hashling NFT founder Jonathan Mills allegedly defrauded partners and took full control of a Bitcoin mining venture funded by others.#nft #bitcoinmining #lawsuit https://t.co/NedpIPyejD

The civil suit, filed May 14, accuses Mills of fraud, breach of fiduciary duty, and unjust enrichment related to two NFT drops on Solana and bitcoin blockchains that failed to deliver promised equity returns.

Meanwhile, Celsius Network founder Alex Mashinsky was sentenced to 12 years in prison on May 8 by U.S. District Judge John Koeltl. He pleaded guilty in December to two counts of fraud after defrauding hundreds of thousands of customers with false promises of high yields on digital asset deposits.

Celsius founder Alex Mashinsky was sentenced to 12 years in prison for defrauding investors with false promises of high crypto returns.#Celsius #AlexMashinskyhttps://t.co/R4syyDiKaU

In a related case, Daniel Schatt and Joseph Podulka, former CEO and CFO of bankrupt crypto lender Cred LLC, pleaded guilty to wire fraud as part of a Department of Justice investigation into the firm’s 2020 collapse

Former Cred CEO & CFO plead guilty to wire fraud in $780M crypto collapse.#lending #cryptofraud #dojhttps://t.co/BnhbV6Nsld

Cred filed for Chapter 11 bankruptcy in November 2020, revealing widespread financial mismanagement. Both executives admitted to misleading customers and partners about the company’s financial health.