Toncoin Loses $2.7 Billion in Market 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 due to uncertainty sparked by the detention of Telegram's co-founder, Pavel Durov.

The incident occurred at a Paris airport on Saturday, where Durov was reportedly detained on suspicion of failing to take steps to prevent the criminal use of Telegram. The world's 10th largest crypto asset, Toncoin, initially slid more than 20% after the news. However, by Monday morning, the token had pared some of the drop and was trading at $5.67, down over 16%, according to data compiled by Bloomberg.

Toncoin is linked to the blockchain project The Open Network (TON), which has access to Telegram's 900 million monthly users via a partnership 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.

While the three-year-old foundation behind TON claims it is separate from Telegram, the close ties have made the former into one of crypto's most-hyped initiatives. Pantera Capital Management LP, for instance, described a purchase of Toncoin in May as the firm's largest-ever investment.

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

According to Richard Galvin, co-founder of hedge fund DACM, which purchased TON tokens in a private round in early 2023, it is "too early to tell" how Durov's detention will affect Telegram in the long term. He added that the weekend market reaction "factored this uncertainty into the TON price" for now.

Galvin highlighted the crucial appeal of the TON-Telegram relationship as "the ability to introduce Telegram's vast user base to crypto functionality," and that "anything that weakens the competitive position of Telegram is ultimately negative for TON in our view.”

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