Binance Russia Ex-Chief Arrested Over $15M Crypto Fraud

Vladimir Smerkis, the former Binance Russia chief and co-founder of the crypto app Blum, has been arrested in Moscow on suspicion of fraud. The arrest is reportedly linked to his involvement in two earlier collapsed crypto ventures, The Token Fund and Tokenbox, which resulted in a total loss of $15 million for investors.

The Zamoskvoretsky District Court ordered Smerkis’s arrest late last week. While official charges have not been disclosed by the authorities, new information has emerged regarding the reasons behind his arrest. According to reports, Smerkis’s arrest may be connected to his earlier ventures, including The Token Fund and Tokenbox, both of which have since shut down.

In 2017, Smerkis launched The Token Fund, a crypto investment vehicle that promised high returns to users who purchased the TKN token. The fund raised approximately $8 million before suddenly shutting down in 2018. Investors in this venture reportedly never recovered their funds. Tokenbox, another project co-founded by Smerkis, raised $7 million in funding. Its native token, TBX, was listed on two crypto exchanges but quickly plummeted in value and became inactive.

Smerkis’s most recent project, Blum, has also come under scrutiny. Blum is a Telegram Mini App that combines crypto trading with gamified elements. The team behind Blum has publicly distanced itself from Smerkis, stating that he had stepped down from his role as CMO and is no longer involved in the development of the project or in any co-founder capacity. Despite these reassurances, the arrest has cast uncertainty over Blum’s upcoming airdrop. The airdrop was intended for users who accumulated Blum Points by playing the Drop Game, a Telegram-based mini app launched by Blum in May 2024. These points were promoted as being convertible into the project’s native crypto tokens. The project initially suggested that the airdrop would take place shortly after the Drop Game ended, but after several extensions and vague updates, it was pushed to the second quarter of 2025, with no confirmed date. As a result, many in the community are now questioning whether the airdrop will take place at all.

The arrest of Smerkis and the subsequent scrutiny of his projects highlight the risks and uncertainties associated with the crypto industry. Investors in crypto ventures often face the challenge of distinguishing between legitimate opportunities and fraudulent schemes. The collapse of The Token Fund and Tokenbox, along with the uncertainty surrounding Blum, serves as a reminder of the importance of due diligence and caution when investing in crypto projects. The crypto industry, while offering potential for high returns, is also rife with risks, and investors must be vigilant in protecting their interests.