The former head of Binance’s CIS division and co-founder of the crypto game Blum, Vladimir Smerkis, has been arrested in Moscow for fraud.
The Zamoskvoretsky District Court ordered his detention earlier this week. Authorities have not disclosed the specific nature of the alleged criminal activity.
The arrest comes as the investigation into tap-to-earn platforms intensifies. Blum clarified that Smerkis is no longer associated with the company in a statement distributed to its 5.3 million followers on X.
Crypto executives’ involvement in fraud cases raises investor tension
Fraud cases involving crypto executives are becoming increasingly common. The desire for personal gain, perceived pressures, and opportunities within their roles are complex interplaying factors that lead executives to engage in fraud. As a result, tension among cryptocurrency investors has increased.
Concerning Vladimir Smerkis’s arrest, Blum shared an X post stating that it would like to let its community know that Smerkis had resigned from his position as Chief Marketing Officer and was no longer working on the project or serving on its team.
Smerkis’s arrest comes at a time when tap-to-earn platforms are under growing global attention. The trend exploded after the viral success of Hamster Kombat in 2024, which introduced millions to the crypto world through the largest token airdrop the industry has seen.
Blum emerged as one of the notable projects riding this wave. The platform became well-known due to the tap-to-earn trend, which involves games in which players tap their screens repeatedly to accumulate digital tokens.
In the case of Blum, players collected in-game currency by tapping falling snowflakes, which the project stated could be converted into actual cash.
According to CoinGecko data, the tap-to-earn segment currently has a $511 million market capitalization.
Alexander Mashinsky pleads guilty to multimillion-dollar fraud
Alexander Mashinsky is another crypto executive allegedly linked to fraud cases. He was arrested in relation to fraud cases on Thursday, May 8, after reports from sources revealed that the former CEO of Celsius Network pleaded guilty to two fraud counts, getting a 12-year prison sentence.
Mashinksy’s legal issues started in 2023. In December of the same year, he pleaded guilty to commodities fraud and Celsius token manipulation. Mashinsky was sentenced in Court 14A, 500 Pearl Street, which also housed several criminal cryptocurrency executives.
Moreover, he was taken into custody on suspicion of wire fraud, commodities, and securities. Around the same time, Celsius reached a $4.7 billion settlement with the FTC.
The settlement made the full extent of the fraud clear. Celsius had to turn over the remaining clients’ assets to file for bankruptcy. This followed accusations against Mashinsky for deceiving investors about the security and profitability of a platform that produced Celsius yields and selling tens of millions of dollars in his company’s personal assets.
In the Southern District of Manhattan, Mashinsky stood before US District Judge John G. Koeltl and faced the truth about what the prosecution claimed was a multimillion-dollar investment scheme.
Mashinsky pleaded guilty and was sentenced on Thursday, ending the lengthy case authorities pursued after the Securities and Exchange Commission and the Commodity Futures Trading Commission accused him and Celsius of committing a multibillion-dollar fraud after initially denying any wrongdoing.
Other formerly influential executives have also experienced similar outcomes to Mashinsky’s for their involvement in fraud cases, including Do Kwon of Terraform Labs, Changpeng Zhao of Binance, and Sam Bankman-Fried of FTX.
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