Over the weekend, Pavel Durov, the founder and CEO of Telegram, showed up in Dubai — in spirit.
At the annual conference for TON, the blockchain closely associated with Telegram, doodles on a large chalkboard plugged a video game inspired by Durov.
One booth had a life-size cardboard cutout of the CEO. And another displayed a buff, cartoonish Durov to advertise a fitness app.
The Telegram CEO, however, wasn’t in the United Arab Emirates. He was in France.
In late August, Durov, who’s reportedly worth more than $15 billion, was released on a €5 million bail under the condition he check in with authorities twice a week and not leave France.
He is facing six preliminary charges for allegedly refusing to cooperate with law enforcement authorities on the distribution of child sexual abuse material and the sale of narcotics on Telegram.
“Using laws from the pre-smartphone era to charge a CEO with crimes committed by third parties on the platform he manages is a misguided approach,” Durov wrote after he was arrested.
Durov’s arrest
There are no new developments in Durov’s case, a spokesperson for the French prosecutor’s office told DL News on Monday.
At first, Durov’s arrest seemed like an existential threat to one of the world’s most popular messaging apps.
Telegram was one of the top 10 most downloaded social apps of 2023, according to Apptopia. And, in July, the Telegram founder said his app had 950 million monthly active users.
By extension, Durov’s arrest seemed like a threat to TON, one of the buzziest projects in crypto.
TON’s native cryptocurrency, Toncoin, ranks among the most valuable cryptocurrencies in the world with a total value of $12.32 billion.
And, while the blockchain is nominally separate from the messaging app, Telegram has chosen TON as its protocol of choice.
If Telegram were to shut down because of a crackdown from authorities, one of TON’s big selling points — its close partnership with the messaging app — would crumble.
‘My hero’
More than a month and a half after Durov’s arrest, Telegram and TON were still chugging along.
At the Grand Hyatt in Dubai, attendees at this year’s TON confab quadrupled to 2,000 from the prior year.
In front of the venue sat a TON-branded Tesla Cybertruck. Outside, conference-goers seemed calm, smoked cigarettes, and chatted in Russian. (Durov was born in Russia.)
When asked what he thought of the Telegram founder, one attendee said, “My hero.”
$1.7 billion ICO
As crypto’s messaging app of choice, Telegram is a key pillar of the industry’s tech stack. It’s also dabbled in crypto itself.
In 2018, Durov’s company raised more than $1.7 billion in an ICO, or initial coin offering, for its own cryptocurrency.
But, in a 2020 settlement with the US Securities and Exchange Commission, Telegram agreed to return more than $1.2 billion to investors and pay an $18.5 million fine.
The messaging app seemingly washed its hands of crypto, but developers outside of Telegram continued working on the project.
And, in September 2023, Telegram announced that it had adopted TON as its blockchain of choice.
Toncoin’s ups and downs
In June, Toncoin surged to an all-time high of $8.17, as tap-to-earn apps on Telegram, such as Hamster Kombat and Catizen, took crypto by storm.
Durov’s arrest on August 24 spelled an end to the rally. Since then, Toncoin has plunged more than 27%.
While Durov waits out his legal proceedings in France, Telegram has begun to implement changes.
It updated its privacy policy to say it will hand over user information to authorities, and tweaked its stance on moderation.
Telegram didn’t respond to a request for comment.
‘News cycle’
Jack Booth, co-founder of TON Society, the entity that organised the TON conference, told DL News that anxiety was heightened after Durov’s arrest.
“It certainly was a bit bad for a couple of weeks,” he said. “But the news cycle moves on.”
Ilia Dubov, CTO of Fitton, the fitness app that showcased the ripped, cartoon-like Durov at the conference, echoed Booth’s take about the impact of Durov’s on TON.
“It is a small threat,” Ilia Dubov, CTO of Fitton, the fitness app, told DL News. “But, as long as people are interested in TON and using TON, it will not significantly affect the TON ecosystem.”
Yet, TON can’t easily shake its perceived association with Durov.
“If something happens to Vitalik Buterin tomorrow, would the Ethereum community react somehow? Would it affect the Ethereum community?” Alena Shmalko, ecosystem lead at the TON Foundation, told DL News. “Of course it would.”
But that doesn’t mean that TON shouldn’t try to further distance itself from its billionaire booster Durov, Shmalko said.
“We need to break this direct relationship,” she added.
Ben Weiss is DL News’ Dubai-based correspondent. Reach out to him at bweiss@dlnews.com.
