Former Binance Russia Chief Jailed 5 Years for $110K Fraud

A Moscow court convicted Vladimir Smerkis, the former head of Binance’s Russia and CIS operations, of large-scale fraud and sentenced him to five years in prison. The charge was brought under Part 4 of Article 159 of the Russian Criminal Code. Prosecutors say Smerkis took about $110,000 (8.8 million rubles) from a crypto blogger and trader, Oleg Polunin, for advertising services that were not provided.

Court documents describe the agreement as a payment for promotional work intended to increase Polunin’s online traffic. Prosecutors argued that the promised advertising did not occur and that Smerkis used the funds for personal expenses. The court accepted the prosecution’s account and imposed the five-year term. The verdict is not final and Smerkis has the right to appeal.

Smerkis led Binance’s operations across Russia and the Commonwealth of Independent States from early 2022 until September 2023. After leaving Binance, he co-founded Blum, a Telegram-based mini-game aimed at the crypto community. Court records show the charges relate to a private contract between Smerkis and Polunin rather than any activity by Binance as a company.

If the sentence is upheld on appeal, Smerkis would be barred from industry activity during the five-year term. An overturned appeal would reverse the conviction and restore his legal status. Prosecutors and the defense may present further arguments during the appeals process.

The case follows broader legal pressure on the crypto industry; Binance reached a $4.3 billion settlement with U.S. authorities in 2023. The Moscow verdict focuses on alleged individual conduct tied to a single commercial agreement, according to the court record.