Pavel Durov, CEO of Telegram, faces a series of legal issues across Europe. In France, he has been indicted and barred from leaving the country, following allegations of criminal activities related to Telegram. Durov is out on €5 million bail with strict reporting conditions. His lawyer, David-Olivier Kaminski, has dismissed the charges as baseless.
In addition to the French case, Durov is under investigation in India for possible misuse of Telegram. The European Union is examining Telegram for potential violations of the Digital Services Act, particularly concerning the reported number of users. Furthermore, Durov is also dealing with an unrelated criminal complaint in Switzerland concerning child abuse, filed by his former partner.
How Pavel Durov’s legal problems affect investors
These legal troubles have created uncertainty for investors in Toncoin, a cryptocurrency associated with Telegram. Major venture capital firms like Pantera Capital, Animoca Brands, and Mirana Ventures have invested heavily in Toncoin, which is linked to Telegram’s blockchain network. However, the ongoing issues with Durov have increased the perceived risk of these investments.
Despite the recent decline of Toncoin's value by 15% to $5.58, some investors remain optimistic. CoinFund's Alex Felix and Ryze Labs' Matthew Graham continue to support their investment in Toncoin. In contrast, Lasse Clausen of 1kx views the situation as a potential "Black Swan event," a rare and unpredictable occurrence that could cause significant market disruption.
The impact of Pavel Durov’s legal problems on the market
It is important to differentiate between Telegram and Toncoin. Following a 2020 settlement with the SEC, Toncoin operates largely independently from Telegram. Experts like Shauli Rejwan of Masterkey VC suggest that Toncoin can maintain its growth despite the legal issues facing Telegram.
Meanwhile, despite the negative news surrounding Durov, the broader crypto market remains relatively stable. Bitcoin has seen a slight increase of 0.8%, trading at $59,676, and Ethereum has risen by 3.8% to $2,553. This suggests that, while Telegram faces difficulties, the cryptocurrency sector, including Toncoin, remains resilient.
While the potential impact of Durov’s legal troubles on Toncoin cannot be ignored, the separation between Telegram and Toncoin suggests that the cryptocurrency’s future might not be as directly affected as initially feared.