The value of Toncoin, a cryptocurrency closely associated with the Telegram messaging app, plunged nearly 20% in just one hour following the arrest of Telegram’s founder, Pavel Durov.
This incident wiped out approximately $2 billion from Toncoin’s (TON) total market capitalization.
Right after the news of Durov's arrest surfaced, TON's price took a steep dive from its stable point of $6.8 to $5.44. By 21:50 Hanoi time, the price of TON had slightly recovered to $5.7, though it was still significantly lower than before. At this price, Toncoin’s market capitalization dropped to about $14.5 billion, down from $16.6 billion.
The impact was not limited to TON alone, as other projects built on the platform also suffered. For example, the GameFi project Tap-to-Earn Notcoin (NOT), which operates on TON, fell by 18%, and the memecoin Durev, inspired by Pavel Durov's image, saw a decline of around 20%.
Toncoin is a cryptocurrency that was originally developed on Telegram’s blockchain, initially known as Telegram Open Network (TON). This initiative was launched by Pavel Durov and his brother Nikolai in 2018. However, in 2020, Telegram had to withdraw from the project due to legal pressures from the U.S. Securities and Exchange Commission (SEC) related to the $1.7 billion raised through the sale of Gram tokens.
Despite Telegram's departure, a team of developers continued the project under the new name of The Open Network, and Gram tokens were rebranded as Toncoin. Even though Telegram is no longer directly involved, Toncoin remains closely tied to the platform and is utilized for various purposes within its ecosystem, including transaction fees and governance.
Around 20:00 on August 24, French television channel TF1 reported that Pavel Durov was arrested at Paris-Le Bourget airport after arriving from Azerbaijan on a private jet. The arrest warrant was issued by OFMIN, France's agency responsible for combating violence against minors, accusing Telegram of inadequate moderation and failure to cooperate with authorities.
The authorities alleged that Telegram’s encryption features have facilitated unchecked criminal activities, and Durov could be seen as an accomplice in various crimes, including 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 boasts around 900 million monthly active users, a significant rise from 500 million users at the start of 2021.
