Arrest of Telegram CEO sparks sharp decline in cryptocurrency linked to the messaging app.
Toncoin, a cryptocurrency closely associated with Telegram Messenger LLP, saw a significant loss of approximately $2.7 billion in market value on Monday after the arrest of the app’s co-founder, Pavel Durov, by French police at an airport near Paris on Saturday evening.
As one of the top ten cryptocurrencies competing with Bitcoin, Toncoin experienced a sudden decline, with prices plunging by around 20% following Durov’s arrest. French authorities detained the Telegram CEO at Le Bourget Airport over alleged offenses related to his popular messaging app. France’s OMFIN, an agency dedicated to preventing violence against minors, has accused Durov of failing to take adequate measures to curb the criminal use of his platform, according to AFP reports.
Despite trading at $5.69 as of 10:36 am on Monday in Singapore, Toncoin remained down 16%, a drop attributed to the fallout from Durov’s arrest, as per data compiled by Bloomberg.
Toncoin and Telegram
Toncoin, previously known as Gram, is the native cryptocurrency of the TON (Telegram Open Network) blockchain. As of August 26, 2024, Toncoin had a market capitalization of $14.39 billion, according to Coinbase.
Although Toncoin claims to operate independently from Telegram, the strong association between the two has positioned Telegram as a significant player in the cryptocurrency world. In May 2024, Pantera Capital, a U.S.-based investment firm, described its investment in Toncoin as the company’s largest-ever investment.
Pavel Durov’s Arrest
Following Durov’s arrest, Telegram responded on its official X (formerly Twitter) account on Monday, asserting that Durov has “nothing to hide.” The company emphasized its compliance with EU laws and dismissed the accusations as “absurd,” arguing that it is unreasonable to hold a platform accountable for the actions of its users.
⚖️ Telegram abides by EU laws, including the Digital Services Act — its moderation is within industry standards and constantly improving.
✈️ Telegram’s CEO Pavel Durov has nothing to hide and travels frequently in Europe.
😵💫 It is absurd to claim that a platform or its owner…
— Telegram Messenger (@telegram) August 25, 2024
TON, on its X account, expressed support for Durov by joining Elon Musk and others in the #FreePavel and #FREEDUROV movements. The platform also temporarily changed its logo to feature the “Resistance Dog” symbol to show solidarity.
#FREEDUROV https://t.co/Hn7LGBPeq2
— TON 💎 (@ton_blockchain) August 25, 2024
Telegram’s Ambitions
Telegram, one of the world’s leading social media platforms, ranked alongside giants like Facebook, YouTube, WhatsApp, Instagram, TikTok, and WeChat, is aiming to reach one billion users by next year.
As the situation unfolds, the arrest of Pavel Durov has not only impacted Toncoin’s market value but also brought increased scrutiny on Telegram and its practices. Investors and users alike will be closely watching how this development affects the future of both the messaging platform and its associated cryptocurrency.
