Toncoin, a cryptocurrency linked to Telegram Messenger LLP, lost about $2.7 billion in market value on Monday after French police arrested the messaging app’s co-founder, Pavel Durov, at an airport near Paris on Saturday night.
One of Bitcoin’s ten biggest rivals, Toncoin suddenly fell, with prices plunging by around 20%, following Durov’s arrest. Police arrested Telegram’s CEO at Le Bourget airport for alleged crimes related to his popular messaging app. France’s OMFIN, an office tasked with preventing violence against minors, accused Durov of failing to take action to curb criminal use of his platform, it said AFP.
Although the 10th-largest crypto asset was trading at $5.69 as of 10:36 a.m. Monday in Singapore, it remains down 16 percent, a decline tracked by the arrest of Pavel Durov, according to data compiled by Bloomberg.
Toncoin and Telegram
Toncoin, formerly known as Gram, is a native cryptocurrency of the TON network. As of August 26, 2024, Toncoin (TON) has a market cap of $14.39 billion, according to Coinbase.
Although Toncoin has said it is separate from Telegram, the ties between the two have made Telegram one of the buzziest crypto initiatives. In May 2024, Pantera Capital, an American investment agency, described its purchase of Toincoin as the firm’s largest investment ever.
The arrest of Pavel Durov
Telegram responded to the arrest of its X executive on Monday, saying Durov had “nothing to hide.”
The messenger said it complied with EU laws and had nothing to hide, adding that it was “absurd” to hold a platform responsible for user abuse.
“It’s too early to say” what impact Durov’s retention will have on Telegram in the long term, said Richard Galvin, co-founder of hedge fund DACM, reported Bloomberg. In early 2023, DACM purchased TON tokens in a private round.
Galvin further emphasized that the biggest appeal of the TON-Telegram tie-up is to turn Telegram’s massive user base towards crypto functionality. Against such a backdrop, “anything that weakens Telegram’s competitive position is negative for TON,” Galvin said, Bloomberg reported.
TON, on his X account, joined Elon Musk in expressing support for Durov, reposting the hashtags #FreePavel and #FREEDUROV and changing his logo to “Resistance Dog”, showing support.
Telegram aims to reach one billion
Telegram is ranked among the major social media platforms after Facebook, YouTube, WhatsApp, Instagram, TikTok and WeChat and aims to reach one billion users in the next year.
Dubai-based Telegram was founded by Russian-born Durov. Forbes estimates Durov’s fortune at $15.5 billion. He left Russia in 2014 after refusing to comply with government demands to shut down opposition communities on the platform.