“Toncoin, the cryptocurrency linked to Telegram, saw its value drop nearly 20% in just one hour after Telegram founder Pavel Durov’s unexpected arrest, wiping out billions from its market capitalization”
In a dramatic turn of events, Toncoin, the cryptocurrency associated with Telegram, experienced a sharp decline in value following the arrest of Telegram’s CEO, Pavel Durov. Within just an hour, the value of Toncoin plummeted by nearly 20%, from a stable price of $6.80 to as low as $5.44. Although it has since recovered slightly to around $5.70-$5.80, the overall market capitalization has suffered a significant loss, decreasing by approximately $2 billion—from $16.6 billion to $14.44 billion.
The downturn in Toncoin’s value also affected other blockchain projects within the same ecosystem. Tap-to-Earn GameFi token Notcoin (NOT) saw an 18% drop, and the memecoin Durev, inspired by Pavel Durov, experienced a 20% decrease.
Originally launched as Telegram Open Network (TON) in 2018, Toncoin was developed by Pavel Durov and his brother Nikolai. However, in 2020, Telegram halted the project due to pressure from the U.S. Securities and Exchange Commission (SEC), which intervened over Telegram’s $1.7 billion fundraising for the Gram token linked to the TON blockchain. The SEC’s actions led to Telegram’s cessation of the TON project.
Following Telegram’s withdrawal, a group of developers continued the project under the new name, The Open Network, and rebranded Gram as Toncoin. Despite this transition, Toncoin remains closely tied to Telegram’s messaging platform, serving various functions within its ecosystem, such as transaction fees and governance.
The recent volatility in Toncoin’s price underscores the challenges faced by blockchain projects heavily linked to prominent individuals. Despite Telegram’s effort to establish TON as an independent ecosystem, market reactions suggest that Durov’s involvement is still seen as crucial to the token’s value.
Pavel Durov was reportedly arrested at Paris-Le Bourget Airport on the evening of August 24. He had arrived from Azerbaijan via private jet. The French anti-violence agency OFMIN issued the arrest warrant, accusing Telegram of insufficient content moderation and inadequate cooperation with authorities. The police believe these issues, combined with Telegram’s encryption features, facilitated criminal activities, potentially implicating Durov in drug trafficking, cyber violence, fraud, organized crime, and terrorism.
Durov, whose net worth is estimated at $15.5 billion by Forbes, has seen Telegram’s user base grow to 900 million monthly users, up from 500 million in early 2021.
