Telegram Founder/CEO Pavel Durov's Arrest Could Have Dire Implications for the Messaging Platform's Crypto-Savvy Criminals

The arrest of Telegram Founder/CEO Pavel Durov could have dire implications for the messaging platform's crypto-savvy criminals.

Telegram founder Pavel Durov’s arrest on August 24 has sparked concern among crypto enthusiasts due to the messaging platform’s popularity with illicit actors.

French prosecutors said Durov was detained as part of a probe opened on July 8 against an “un-named person” for a multitude of Telegram-linked crimes, including drug trafficking, child sex abuse material (CSAM), organized fraud, money laundering, distribution of digital hacking tools, and “providing cryptology services aiming to ensure confidentiality without certified declaration.”

The unnamed individual is also accused of refusing “to communicate, at the request of competent authorities, information or documents necessary for carrying out and operating interceptions allowed by law.”

The seriousness of Durov’s arrest was underscored by a charge of “criminal association with a view to committing a crime or an offense punishable by 5 or more years of imprisonment.”

France’s AFP wire service said the arrest warrant was issued by OFMIN, a branch of the French police focused on crimes against children. OFMIN Head Jean-Michel Bernigaud wrote a LinkedIn post saying the crux of the warrant involved Telegram’s “lack of moderation and cooperation … particularly in the fight against pedocriminality.”

Following Durov’s arrest, Telegram issued a statement saying it was “absurd to claim that a platform or its owner are responsible for abuse of that platform.” Telegram insisted that its moderation policies are “within industry standards and constantly improving.”

A Russian national, Durov also holds citizenship in France, the United Arab Emirates, and St. Kitts & Nevis. Both Russian and Emirati officials have reportedly sought consular access to Durov. Late on August 26, a French judge extended Durov’s police custody for up to 48 hours, after which the authorities must either charge or release him.

In June, Durov told Tucker Carlson that Telegram had only “about 30” full-time staff, few of whom appear to be tasked with monitoring the activity of Telegram’s nearly 1 billion users. It’s not surprising that Telegram’s laissez-faire approach has made it a hub for activities frowned upon by most governments.

Telegram has long been known as a platform on which criminality thrives, a darknet marketplace accessible by virtually anyone. Drugs, guns, CSAM, hacking tools, stolen personal data… it’s all there for the asking without having to learn how to use Tor software, with payments predominantly made using digital assets.

Telegram has proven popular with terrorist groups, including (at one point) ISIS. Terror groups in India are also said to be fans of the platform, and local media reported that India’s ministries of Home Affairs and Electronics & Information Technology were recently asked “what action can be taken” against Telegram, although these reports are said to focus on Telegram-based extortion and illegal gambling.

Multiple French government websites—including the Administrative Court of Paris—were targeted by distributed denial of service (DDoS) attacks that briefly took them offline after Durov was detained.

Also protesting Durov’s arrest was Paolo Ardoino, CEO of the Tether (USDT) stablecoin, who called Durov’s arrest “very concerning.” Ardoino claimed that Durov was detained “for enabling free speech communications” and doom-posted that “If we, as a society, lose the battle to defend freedom of speech and communication, nothing else won’t matter, dark ages will be our future.”

In April, Tether launched USDT on The Open Network (TON), a Durov-developed blockchain affiliated with Telegram. Since then, the total amount of USDT on TON has risen to nearly $620 million, with an additional $110.3 million in ‘authorized but not issued’ USDT.

One of the key features of USDT-on-TON is the network’s direct access to fiat on-ramps. Off-ramps to bank accounts/cards were said to have been in development at the time of that April launch.

Like Telegram, Tether has unsuccessfully tried to shed its own association with criminality, with no less an authority than the United Nations Office on Drugs and Crime (UNODC), citing USDT’s role in organized crime’s banking architecture.

Some Russian public figures have claimed that Durov’s arrest was “targeting TON cryptocurrency, which is used as a wallet by many large Russian businesspeople.”

TON launched a native token (Toncoin) several years ago after a failed attempt to launch a token called GRAM directly on Telegram. The U.S. Securities and Exchange Commission (SEC) put the kibosh on this GRAM plan, warning Telegram of the illegality of issuing unregistered securities via initial coin offerings. Telegram ultimately refunded the money it raised via this ICO and reached an $18.5 million settlement with the SEC in June 2020.

Telegram integrated Toncoin into its user interface last November, allowing direct payments between Telegram users, leading to a spike in the token’s

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