Telegram-linked crypto token sheds $3.5 billion after CEO Pavel Durov held
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Toncoin slid more than 20 per cent after Telegram's billionaire co-founder was taken into custody.
PHOTO: AFP
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Mumbai - A digital asset from a blockchain project linked to Telegram Messenger has lost about US$2.7 billion (S$3.5 billion) in market value, reflecting the uncertainty sparked by the detention of the messaging app’s billionaire co-founder and chief executive.
Toncoin, the token of The Open Network, slid more than 20 per cent after Mr Pavel Durov was taken into custody at a Paris airport on Aug 24 on suspicion of failing to take steps to prevent criminal use of Telegram.
The 10th-largest crypto asset pared some of the drop to trade at US$5.69 as at 10.36am on Aug 26 in Singapore but was still down 16 per cent as a result of the unfolding drama over 39-year-old Mr Durov, according to data compiled by Bloomberg.
The Open Network – or TON – blockchain has access to Telegram’s 900 million monthly users via a partnership and seeks to enable services such as in-app payments and games. TON’s rise spurred speculation that Telegram has a shot at becoming a “super app” in the style of Chinese giants like WeChat.
The value of assets locked on the TON blockchain surged in 2024 to a peak of US$1.1 billion in July, but the figure has now retreated to US$661 million, data from DefiLlama showed. Toncoin’s price more than tripled in the past year and the token has a current market value of about US$14.4 billion, according to CoinGecko.
The three-year-old foundation behind the project says it is separate from Telegram. But the ties between Telegram and TON turned the latter into one of crypto’s most-hyped initiatives. Pantera Capital Management in May described a purchase of Toncoin as the firm’s largest-ever investment.
It is “too early to tell” what impact Mr Durov’s detention will have on Telegram in the longer term, said Mr Richard Galvin, co-founder of hedge fund DACM, which purchased TON tokens in a private round in early 2023. The weekend market reaction has “factored this uncertainty into the TON price” for now, he added.
Mr Galvin said the key appeal of the TON-Telegram relationship “is the ability to introduce Telegram’s vast user base to crypto functionality”, and that “anything that weakens the competitive position of Telegram is negative for TON”.
Telegram issued a statement saying it abides by European laws, including the Digital Services Act, and that Mr Durov has “nothing to hide”.
Governments have faulted Telegram’s relatively light-touch approach to content moderation for encouraging criminality, while free-speech proponents praise the platform as a venue for open discussion. Telegram is popular with the crypto community, for instance for sharing investment tips.
TON on its X social media account joined the likes of Mr Elon Musk in expressing backing for Mr Durov, reposting the hashtags #FreePavel and #FreeDurov and changing its logo to the “Resistance Dog” in a further show of support. REUTERS
