Vladimir Smerkis, co-founder of the Telegram Mini App Blum, has been detained in Russia on allegations of large-scale fraud, according to reports from the Russian news outlet TASS.

His arrest occurred on May 16, 2025 at the Zamoskvoretsky District Court in Moscow, although formal charges have not been disclosed.

Authorities said that Smerkis was apprehended as part of a criminal investigation into “fraud on an especially large scale.”

Some reports suggest the case may involve his previous ventures, including The Token Fund and Tokenbox, which raised considerable funds but are currently inactive.

Following the arrest, Blum announced on its X account that Smerkis is no longer serving as Chief Marketing Officer or involved in any project development.

🔗 Source: The Block

🧠 Food for thought

1️⃣ Crypto fraud cases reveal consistent patterns despite regulatory efforts

Smerkis’s arrest is part of a concerning pattern of crypto project founders facing fraud charges, despite increasing regulatory awareness of these schemes.

Similar high-profile cases include the BitClub Network’s $722 million fraud scheme which operated for over five years before authorities intervened, with perpetrators brazenly referring to investors as “sheep” in internal communications 1.

The Control-Finance Limited case demonstrated the same pattern, misappropriating 22,858 Bitcoin (valued at $147 million) while falsely claiming to employ expert traders generating guaranteed daily profits of 1.5% 2.

These cases persist despite regulatory warnings, with the SEC and CFTC specifically highlighting red flags such as promises of guaranteed returns (often 20-50%) and “zero risk” claims that appear in case after case 3.

Even with increased scrutiny, crypto fraud appears to be evolving rather than disappearing, with perpetrators adapting their techniques while maintaining the same fundamental approach of unrealistic promises.

2️⃣ Failed previous ventures often predict future controversies

Smerkis’s arrest reportedly relates to his earlier projects The Token Fund and Tokenbox, which raised millions but “faded into obscurity,” showing how past project failures can foreshadow future issues.

According to reports, these previous ventures may have caused investor losses of approximately $15 million before Smerkis moved on to co-found Blum 4.