Telegram Founder Pavel Durov Arrested: What's Next for Crypto?

Pavel Durov, the founder of the social media giant Telegram, was arrested in France on August 25th due to a regulatory investigation, sending shockwaves through the cryptocurrency market. BBC reported that Durov may face charges related to Telegram's alleged failure to cooperate with law enforcement in investigations involving drug trafficking, child sexual content, and fraud. Toncoin, a cryptocurrency closely tied to Telegram, experienced a significant drop of over 20% as a result. At the time of writing, Toncoin had fallen by 13.84% to $5.77 per coin.

Who is Pavel Durov?

The 40-year-old Russian-born entrepreneur, Pavel Durov, founded both the social media platform VKontakte (VK) and the messaging app Telegram. Currently residing in Dubai and a French citizen since 2021, Durov was inspired by Facebook to create VK in 2006 and Telegram in 2013. Internal disputes led to his resignation as CEO of VK in 2014, prompting him to leave Russia and eventually acquire French citizenship.

VK has since grown into Russia's largest social media platform, while Telegram boasts a massive user base in Russia, Ukraine, and other countries, serving as a primary social platform for Russian media and Russian-speaking users. With the goal of reaching 1 billion users next year, Telegram's popularity continues to expand. Forbes estimates Durov's net worth at $15.5 billion.

Unlike many tech companies, Telegram has never conducted an initial public offering (IPO). Instead, the platform has raised over $15 billion through bond sales and an additional $17 billion from cryptocurrency projects as of April this year.

Why was Durov Arrested?

French authorities arrested Durov due to a lack of oversight on Telegram, allowing for a rise in criminal activities like the spread of misinformation and hate speech.

Russian State Duma Deputy Chairman Davankov appealed to the Russian Foreign Minister to intervene and secure Durov's release. The Russian Foreign Ministry confirmed that the Russian Embassy in France had taken steps to inquire about his situation.

Impact on Telegram

Durov's arrest could create a leadership void within Telegram, despite potential contingency plans. The absence of a charismatic and visionary founder could influence the company's future direction.

Increased regulatory scrutiny is likely, with authorities potentially imposing fines, restrictions, or even bans if evidence of wrongdoing is found. Additionally, the arrest could erode user confidence in Telegram's security and privacy.

Impact on the Cryptocurrency Market

The Open Network (TON), a blockchain project originally founded by Telegram, aims to create a decentralized platform for applications and digital assets. Due to regulatory hurdles, TON was abandoned in 2020 but has since been revived by the NewTON team.

Leveraging Telegram's massive user base, TON offers a streamlined experience for cryptocurrency transactions, making blockchain technology more accessible. Before Durov's arrest, Telegram boasted over 950 million users, largely driven by the platform's "mini apps" integrated with cryptocurrency games. Hamster Kombat, one of these games, attracted over 300 million players prior to its token airdrop.

Influenced by the outcome of Durov's legal case:

• Toncoin Price Volatility: The price of Toncoin, the cryptocurrency associated with Telegram, is likely to remain volatile in the short term.
• Investor Confidence: The arrest could damage investor confidence in the cryptocurrency market as a whole.
• Regulatory Pressure: The arrest may increase regulatory pressure on other cryptocurrency projects.

Global Reaction

The arrest of Durov has sparked widespread condemnation from the tech community and cryptocurrency enthusiasts. Elon Musk, has publicly criticized the arrest on Twitter, arguing that it is an attack on freedom of expression.

POV: It’s 2030 in Europe and you’re being executed for liking a meme

Rumble will not stand for this behavior and will use every legal means available to fight for freedom of expression, a universal human right. We are currently fighting in the courts of France, and we hope for Pavel Durov’s immediate release.

#FREEDUROV campaign

A social media campaign, #FREEDUROV , has been launched to call for Durov's immediate release. Supporters are using the hashtag #FREEDUROV to raise awareness and put pressure on authorities to free him.

To incentivize participation, the campaign is offering rewards in Toncoin, the cryptocurrency associated with Telegram.

How can I participate and claim my reward?

1. Connect your wallet: To claim your Toncoin reward, you'll need to connect a compatible cryptocurrency wallet to the campaign platform. This allows the organizers to verify your participation and send you the tokens.
2. Claim your 10,000 NOT: Once your wallet is connected, you'll be eligible to receive 10,000 NOT tokens as a reward for your support.
3. Use the hashtag（optional）: Simply include the hashtag #FREEDUROV in your social media posts to show your support.
   
   

Potential Future Developments

Best-Case Scenario:

Durov's Acquittal and ReturnIf Durov is cleared of charges and returns to lead Telegram, the company could recover and continue to grow. Toncoin's price could rebound, and investor confidence in the cryptocurrency market could be restored.

Worst-Case Scenario:

Toncoin Price Crash If Telegram faces significant legal challenges and Durov is unable to return to the company, it could face a decline in user base and market share. Toncoin's price could plummet, and the broader cryptocurrency market could suffer.

Middle Ground:

A more likely scenario is that Telegram will continue to operate, but with increased regulatory oversight. The company may need to make changes to its operations to comply with legal requirements. Toncoin's price could stabilize at a lower level than before the arrest.

Conclusion

The arrest of Pavel Durov has cast a long shadow over Telegram and the cryptocurrency market. While the immediate consequences are clear, the long-term implications remain uncertain. As the legal proceedings unfold, the fate of Telegram and Toncoin hangs in the balance.