Toncoin Loses $2.7B of Value as Telegram Co-Founder Pavel Durov Is Detained

Toncoin, the token of The Open Network, slid more than 20% after Pavel Durov was reportedly taken into custody at a Paris airport on Saturday.

A digital asset linked to Telegram Messenger, called Toncoin, has lost about $2.7 billion in market value after the detention of the messaging app's co-founder sparked uncertainty.

Toncoin, the native token of The Open Network (TON), slid more than 20% on Monday after news that Pavel Durov was detained at a Paris airport on suspicion of failing to take steps to prevent criminal use of Telegram.

The token, which is ranked as the 10th largest cryptoasset, pared some of the drop and was trading at $5.69 as of 10:36 a.m. Monday in Singapore, but was still down 16% as a result of the unfolding drama, according to data compiled by Bloomberg.

The TON blockchain has a partnership with Telegram that gives it access to the messaging app's 900 million monthly users, and aims to enable services like in-app payments and games.

TON's rise has fueled speculation that Telegram could become a “super-app” like Chinese giants WeChat, offering a broad range of services within a single platform.

The three-year-old foundation behind the TON project maintains that it is separate from Telegram. However, the close ties between the two have made TON into one of crypto's most-hyped initiatives.

Pantera Capital Management LP disclosed in May that it purchased Toincoin as part of a larger crypto acquisition, describing the Toncoin purchase as the firm's largest-ever investment.

Billionaire Durov is also the chief executive officer of Telegram. The Dubai-based company issued a statement saying that it abides by European laws, including the Digital Services Act, and that Durov has “nothing to hide.”

It’s “too early to tell” what impact Durov's detention will have on Telegram longer term, said Richard Galvin, co-founder of hedge fund DACM, which purchased TON tokens in a private round in early 2023. The weekend market reaction “factored this uncertainty into the TON price” for now, he added.

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.”

Governments have criticized Telegram's light-touch approach to content moderation for facilitating criminal activity, while free-speech advocates view the platform as a space for open discussion.

Telegram is used by the crypto community, for example, to share investment tips.

On its X social-media account, TON expressed support for Durov, reposting the hashtags #FreePavel and #FREEDUROV and changing its logo to the “Resistance Dog” in a further show of solidarity.

The value of assets locked on the TON blockchain surged this year to a peak of $1.1 billion in February, but the figure has now decreased to $661 million, according to data from DefiLlama.

Toncoin's price more than tripled in the past year and the token has a current market value of about $14.4 billion, data from CoinGecko shows.

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