(Bloomberg) — A digital asset from a blockchain project linked to Telegram Messenger LLP has lost about $2.7 billion in market value, reflecting the uncertainty sparked by the detention of the messaging app’s co-founder.
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Toncoin, the token of The Open Network, slid greater than 20% after Pavel Durov was reportedly taken into custody at a Paris airport on Saturday on suspicion of failing to take steps to forestall criminal use of Telegram.
The tenth largest cryptoasset pared a number of the drop to trade at $5.67 as of seven:25 a.m. Monday in London but continues to be down over 16% in consequence of the drama involving 39-year-old Durov, in keeping with data complied by Bloomberg.
The Open Network — or TON — blockchain has access to Telegram’s 900 million monthly users via a partnership and seeks to enable services resembling in-app payments and games. TON’s rise spurred speculation that Telegram has a shot at becoming a “super-app” within the variety of Chinese giants like WeChat.
Enterprise Backing
The three-year-old foundation behind the project says it’s separate from Telegram. However the ties between Telegram and TON turned the latter into one in all crypto’s most-hyped initiatives. Pantera Capital Management LP in May described a purchase order of Toncoin because the firm’s largest-ever investment.
Billionaire Durov can also be Telegram’s chief executive officer. The Dubai-based company issued a press release saying it abides by European laws, including the Digital Services Act, and that Durov has “nothing to cover.”
It’s “too early to inform” what impact Durov’s detention could have on Telegram long run, said Richard Galvin, co-founder of hedge fund DACM, which purchased TON tokens in a personal round in early 2023. The weekend market response “factored this uncertainty into the TON price” for now, he added.
Galvin said the important thing appeal of the TON-Telegram relationship “is the power to introduce Telegram’s vast user base to crypto functionality,” and that “anything that weakens the competitive position of Telegram is negative for TON.”
Free-Speech Debate
Governments have faulted Telegram’s relatively light-touch approach to content moderation for encouraging criminality, while free-speech proponents praise the platform as a venue for open discussion. Telegram is popular with the crypto community, as an example for sharing investment suggestions.
“While there are some communities who utilize Discord, Signal and X for group communications, the crypto ecosystem does have a disproportionate dependency on Telegram,” said Stephany Zoo, head of ecosystem at market maker Caladan. “If Telegram is affected, there will likely be reverberating consequences.”
TON on its X social-media account joined the likes of Elon Musk in expressing backing for Durov, reposting the hashtags #FreePavel and #FREEDUROV and changing its logo to the “Resistance Dog” in an additional show of support.
The worth of assets locked on the TON blockchain surged this 12 months to a peak of $1.1 billion last month however the figure has now retreated to $667 million, data from DefiLlama show. Toncoin’s price greater than tripled up to now 12 months and the token has a current market value of about $14.4 billion, in keeping with CoinGecko.
–With assistance from Ryan Weeks.
(Updates markets from the third paragraph.)
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