Telegram-Linked Cryptos Face Uncertainty

We are not new to CEOs being arrested; it has happened frequently in recent years. From Binance’s Changpeng Zhao to FTX’s Sam Bankman-Fried, the law has come for many CEOs. Even Donald Trump had a taste of arrest earlier this year, and now the latest addition to the growing number of high-profile arrests is Telegram’s boss.

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Pavel Durov, the founder of the popular messaging app Telegram, was arrested in France on Saturday, August 24, 2024, when his plane landed at LE Bourget airport in Paris. The news took the internet by storm, and many netizens believed it was a politically motivated arrest. 

However, French President Emmanuel Macron firmly stated in an official statement that his arrest had no political motive. According to Macron, Durov’s arrest was part of an investigation into crimes related to child pornography, drug trafficking and fraud transactions, all carried out one way or another through Telegram.

While the case is still in development, many cryptocurrencies linked to the Crypto-friendly Telegram app have experienced steep declines after the arrest of the app’s founder. Toncoin (TON), for one, has gone down. The popular tap-to-earn Notcoin (NOT) has also seen a similar price fall, and so have other coins, including PAAL AI (PAAL).

Notcoin has been hit the hardest. On August 22, the coin’s price was $0.010, and it was well on its way to a $0.012 valuation, but Durov’s arrest seems to have dented that ambition. Notcoin has already lost approximately $3.7 billion in market value, which is a 20% downward plunge. 

PAAL AI and Toncoin have also experienced a fate similar to Notcoin's. These developments show a clear trend of anxiety and panic among traders of those coins and have sparked questions about a possible comeback of those coins. So far, nothing is certain, but analysts have suggested that what happens next may be tied to the outcome of the legal proceedings against Durov. 

When Durov will be released is just as uncertain as the future of the cryptocurrencies linked to Telegram. However, a press release from French prosecutors suggested that he could be released by Wednesday. This has not assuaged the fears of the crypto market, which believes Durov may be detained until sometime in October.

Durov’s case has been criticized by Telegram and the world’s richest man, Elon Musk. Telegram has claimed that their boss, Durov, “has nothing to hide” and that “it is absurd to claim that a platform or its owner is responsible for the abuse of that platform.” Elon Musk also took to his social media platform X to hashtag #FreePavel.

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The case does not seem like it’s going to be an easy one. Links to child porn, fraud and drug activity are not easy ones to get rid of. However, Durov is undoubtedly not alone. Support from major world players like Elon Musk, Vitalik Buterin and even the Kremlin will ensure that the French prosecutors don’t have it easy.

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