A digital asset tied to a blockchain project linked to the Telegram app has lost about $2.7 billion in market value, as a result of the uncertainty caused by the detention of the messaging app’s co-founder.
The Open Network's Toncoin fell more than 20% after reports that Pavel Durov was detained at a Paris airport on Saturday on suspicion of failing to prevent criminal use of the Telegram app.
TonCoin #TONCOİN , the 10th-largest digital asset by market cap, has partially recovered to trade at $5.67 as of 9:25 a.m. Riyadh time on Monday, but is still down more than 16% on the 39-year-old Durov affair.
The Open Network, which has access to 900 million monthly users via a partnership with Telegram, aims to offer services such as in-app payments and gaming. The surge in $TON has sparked speculation that #تيلغرام could become an “omnibus app” in the vein of Chinese tech giants like #wechat .
Investment support
The foundation behind the project, which was founded three years ago, says it is separate from Telegram. However, the links between Telegram and $TON have made the latter one of the most exciting projects in the crypto world. In May, Pantera Capital Management LP described its purchase of Toncoin as its largest investment ever.
Billionaire Durov is also the CEO of Telegram. The Dubai-based company issued a statement saying it complies with European laws, including the Digital Services Act, and that Durov has “nothing to hide.”
Richard Galvin, co-founder of hedge fund DACM, which bought TON in early 2023, said it was “too early to judge” the long-term impact of Durov’s detention on Telegram. He noted that the market’s reaction over the weekend “reflected this uncertainty in the TON price” for now.
Galvin added that the main appeal of the Telegram relationship is “the ability to offer cryptocurrency services to Telegram’s large user base,” and that “anything that weakens Telegram’s competitive position is negative for TON.”
Freedom of expression discussion
Several governments have criticized Telegram’s relatively lax approach to content moderation, saying it encourages crime, while free speech advocates hail the platform as a forum for open discussion. Telegram is popular in the cryptocurrency community, where it is used to share investment advice.
TON's social media account X expressed support for Durov, along with figures like Elon Musk, by reposting the hashtags#FreePaveland #FREEDUROV.
The value of assets held on the TON network peaked at $1.1 billion last month this year, but that figure has now fallen to $667 million. The price of Toncoin has more than tripled over the past year and its current market cap is around $14.4 billion.
