The value of Toncoin, a cryptocurrency closely linked to the Telegram messaging platform, plummeted nearly 20% within just an hour following the arrest of Telegram’s founder, Pavel Durov.
This event wiped out approximately $2 billion from Toncoin’s (TON) market capitalization.
Immediately after news of Durov’s arrest broke, TON’s price dropped sharply to $5.44 from its previous stable level of $6.8. By 21:50 Hanoi time, the price of TON had recovered slightly to $5.7, but it remained significantly lower than before. At this price, TON’s market capitalization was reduced to around $14.5 billion, down from $16.6 billion.
Not only TON, but also other projects built on this platform were affected. For instance, the GameFi Tap-to-Earn Notcoin (NOT) running on TON dropped by 18%, while the memecoin Durev, inspired by Pavel Durov’s image, fell by around 20%.
Toncoin is a cryptocurrency built on Telegram’s blockchain, initially known as Telegram Open Network (TON). This project was initiated by Pavel Durov and his brother Nikolai in 2018. However, by 2020, Telegram was forced to abandon the project due to legal pressures from the U.S. Securities and Exchange Commission (SEC) related to the $1.7 billion raised from the sale of Gram tokens.
Although Telegram withdrew from the project, a group of developers continued the work and rebranded it as The Open Network, with Gram tokens being renamed Toncoin. Despite no longer being directly associated with Telegram, Toncoin maintains a close connection to the platform and is used for various functions within the ecosystem, such as transaction fees and governance.
At around 20:00 on August 24, French television channel TF1 reported that Pavel Durov had been arrested at Paris-Le Bourget airport after arriving from Azerbaijan on a private jet. OFMIN, France’s agency responsible for combating violence against minors, issued the arrest warrant for Durov, accusing Telegram of insufficient moderation and lack of cooperation with authorities.
The police alleged that this situation, combined with Telegram’s encryption features, has facilitated unchecked criminal activities, and Durov could be considered an accomplice in activities such as drug trafficking, cyber violence, fraud, organized crime, and incitement to terrorism.
Pavel Durov, the founder of Telegram, currently has an estimated net worth of $15.5 billion according to Forbes. The messaging platform now has approximately 900 million monthly users, a significant increase from 500 million users at the beginning of 2021.
