Telegram Founder Pavel Durov Causes Toncoin to Suffer Over 20% Losses

Key Points:

• Toncoin, linked to Telegram, lost over 20% of its market value after Telegram founder Pavel Durov was arrested in France.
• French authorities arrested Pavel Durov as part of a broad cybercrime investigation involving alleged criminal activities on Telegram.

The cryptocurrency linked to the messaging application Telegram, Toncoin, plummeted sharply after the French authorities arrested Telegram founder Pavel Durov.

Read more: Telegram Founder Pavel Durov Is Still Detained by French Authorities

Toncoin Value Plummeting Following Telegram Founder’s Arrest

Toncoin tanked over 20% in one weekend, though has since come back somewhat. It ranks now as the world’s 10th largest cryptocurrency at a market capitalization of about $13.3 billion.

Although Toncoin is now technically independent from Telegram, the market’s response shows that traders still believe it’s connected to the platform. Telegram had intended to issue the native cryptocurrency of the TON network, then called GRAM, in an ICO back in 2018.

However, for some regulatory reasons, the U.S. Securities and Exchange Commission SEC barred this move in 2020 and compelled Telegram to make the technology open source. Toncoin was the result of that. Eventually, Telegram integrated it into the platform.

The arrest of Telegram founder Pavel Durov has also impacted other projects in the TON ecosystem. NOT, a blockchain-based GameFi project, saw the value of its native token slip 22%, while the memecoin Durev-named after the founder of Telegram-fell by some 18%.

French Authorities Arrest Pavel Durov for Questioning in Cybercrime Case

French authorities have said Durov’s arrest is part of a broader cybercrime investigation over alleged crimes on Telegram and not cooperating with the police.

The Tribunal Judiciaire de Paris has related the probe to so-called cryptographic services and tools. Despite the ongoing investigation, President Emmanuel Macron reiterated France’s commitment to freedom of speech, addressing misinformation surrounding the incident and emphasizing the nation’s support for free expression.