The CEO of Telegram was arrested in France; Toncoin fell 23% because of market turbulence and legal concerns.
TakeAway Points:
- Toncoin fell 23% after Telegram CEO Pavel Durov was arrested in France on charges of not doing enough to stop illegal use of the platform.
- Telegram says it complies with EU law and is waiting for a swift conclusion, while the Russian embassy requests clarification and access to consulates.
- Due to Telegram’s content moderation standards, Durov, a co-founder of VKontakte and current net worth of over $9 billion, has come under fire from international law enforcement.
Telegram CEO arrested and detained
Pavel Durov, the billionaire co-founder and CEO of Telegram, was detained at Le Bourget airport in Paris on Saturday. The 39-year-old was taken into custody on suspicion of failing to prevent criminal activities on the Telegram platform, according to Agence France-Presse (AFP). His detention was extended by 24 hours late Sunday, with a judicial official confirming the extension.
Telegram, a Dubai-based company, issued a statement asserting that Durov has “nothing to hide” and that the company complies with European laws, including the Digital Services Act.
“It is absurd to claim that a platform or its owner are responsible for abuse of that platform. We’re awaiting a prompt resolution of this situation,” the statement read.
Effect on the Market
The news of Durov’s detention had immediate repercussions in the cryptocurrency market. Toncoin, a cryptocurrency linked to Telegram, plummeted by as much as 23% following the announcement. This sharp decline underscores the market’s sensitivity to regulatory and legal actions involving key figures in the tech and crypto industries. Investors should note that such events can lead to significant volatility, affecting not just the specific cryptocurrency but potentially the broader market as well.
Political and legal reactions
France’s Ofmin, an agency dedicated to combating violence against minors, issued the arrest warrant for Durov. The agency is coordinating a preliminary investigation into alleged offenses including fraud, drug trafficking, cyberbullying, organized crime, and the promotion of terrorism, according to the AFP. The Russian Embassy in Paris has demanded an explanation from French authorities and requested consular access to Durov.
“French authorities must ensure the protection of his rights and provide consular access,” the embassy stated.
Despite Russia’s frequent attempts to ban Telegram, Kremlin-controlled media and several Russian politicians have portrayed Durov’s arrest as an attack on freedom of speech, suggesting it could be politically motivated.
In contrast, French President Emmanuel Macron dismissed these claims, stating,
“France is deeply committed to freedom of expression and communication. The arrest of the president of Telegram on French soil took place as part of an ongoing judicial investigation. It is in no way a political decision. It is up to the judges to rule on the matter.”
Impact on Telegram
Telegram, created by Durov and his brother Nikolai, boasts around 900 million active users and is one of the most popular messaging apps globally. Its relatively lenient approach to content moderation has led to allegations of its use for criminal activities and extremist material. The platform’s architecture allows users to publish news, share videos, and send geographic locations, making it a versatile tool but also a target for misuse. Earlier in July, several popular Ukrainian news channels on Telegram were hacked to spread provocative messages, affecting channels with hundreds of thousands to millions of subscribers.
Durov, who fled Russia in 2014 and sold his stake in the social network VKontakte, has a net worth exceeding $9 billion, according to the Bloomberg Billionaires Index. In an April interview with former Fox News host Tucker Carlson, Durov discussed the pressures he faced from Russian authorities while running VKontakte and the scrutiny Telegram faces from law enforcement agencies worldwide.
“I would rather be free, I wouldn’t want to take orders from anyone,” Durov said during the interview.
