- Following Pavel Durov's detention, his cryptocurrency venture experiences a downturn.
Pavel Durov left his private jet, accompanied by a bodyguard and a woman. According to French media, a dinner at a Paris restaurant was scheduled. However, Durov, 39, was met by police at Le Bourget airport and taken into custody.
Durov is the head of the messaging app Telegram, which boasts around 900 million monthly users for encrypted communication. Nevertheless, he has ignored legal obligations in various countries. French authorities have now issued an arrest warrant against him as part of an investigation into suspected fraud, drug trafficking, organized crime, terrorism financing, and cyberbullying.
As quoted by TV1, an investigator said, "He made a mistake tonight. We don't know why." It was reported that French authorities were searching for Durov, who typically resides in Dubai.
An IPO was planned
Durov's detention could have serious implications for Telegram, as he manages the company with a small team of only 50 employees, including his brother Nikolai. With an estimated net worth of $15 billion, Durov is a crucial figure for the app. Over the years, Telegram has transformed into a social network with channels and was even considering an IPO in the US.
The uncertainty following Durov's arrest is evident in the related cryptocurrency project TON (The Open Network). The price of Toncoin, one of the largest cryptocurrencies, briefly dropped by 20%. The project has lost $2 billion in market capitalization since the arrest. TON was seen as ambitious and promising, with a large portion of the crypto community already active on Telegram. Nikolai Durov, the programming genius behind Telegram, had conceived the concept for its own blockchain years ago. The project had secured $1.7 billion from major investors before the first major crisis, when problems with the US Securities and Exchange Commission (SEC) forced Telegram to abandon its plans and return some of the money to investors.
A restart without Telegram?
An independent team was supposed to continue developing the blockchain, with the Durovs officially handing the project over to the community. Since then, the TON team has emphasized that the cryptocurrency and the app are two distinct projects. However, how much value would TON have without Telegram?
In reality, the connection between the two remained close, and it contributed to TON's successful restart. In the past two years, the blockchain has climbed to the top ten of cryptocurrencies, with a market value of $25 billion. The amount of Toncoin that Pavel Durov still holds is unknown.
On the Telegram platform, the TON blockchain has long been deeply integrated. This is how the advertising network operates, and TON wallets are integrated into the app. For instance, money can be transferred between Telegram users. Statements show that at times, the Tonkeeper wallet app became one of the most popular apps. In Germany, it even reached the top spot in the spring. With 900 million monthly active users, Telegram in combination with TON seemed to have a chance to introduce crypto to the masses.
Following the news about Telegram's founder Pavel Durov, representatives of the TON network spoke out:
"We want to assure everyone that the TON community remains strong and fully operational.
As a community committed to freedom of speech and decentralization, we stand firmly by Pavel during this challenging time. Pavel has been a dedicated advocate for these values, and we believe his efforts to promote an open and decentralized internet will continue to inspire millions."
Emphasizing independence from Telegram, the talk also pointed out that the market's misinterpretation had caused the stock drop, but the future of Telegram and the large messaging network remains uncertain.
Tech giants like Elon Musk or David Sacks are supporting Durov, and even whistleblower Edward Snowden has sided with the Telegram founder.
This text was first published by Finance Forward, the magazine for the new financial world, created in cooperation between Capital and OMR.
Despite the arrest warrant and Durov's detention, French authorities have not disrupted the operation of the TON blockchain on Telegram. The integration of TON within Telegram's advertising network and wallet system continues to be a significant draw for users.
Amidst the uncertainty surrounding Durov's arrest, the TON community has reaffirmed its strength and commitment to decentralization, emphasizing its independent status from Telegram.
