Telegram’s cryptocurrency Toncoin has fallen in price by nearly 19% following the arrest of the platform’s founder and CEO Pavel Durov, Russian business daily Vedomosti reported on Monday, citing data from the Binance cryptocurrency exchange.
The Telegram Open Network (TON) blockchain was initially announced back in 2018 by Durov and his brother Nikolay. However, in 2020 they were forced to abandon the project due to litigation with the US Securities and Exchange Commission (SEC) which had sued Telegram for raising $1.7 billion through the initial coin offering.
Nevertheless, in September of last year, Durov presented the TON blockchain and the Toncoin cryptocurrency. The entrepreneur stated at the time that the coin would be used regularly by businesses and developers in Telegram.
Prior to Durov’s arrest on Saturday, Toncoin was valued at $6.79. By 3pm Moscow time on August 26, the coin’s value had dropped to $5.5, according to Binance data, Vedomosti said. TON also dropped out of the list of the top ten most active currencies on international platforms and its market capitalization has fallen from $17.1 billion to $14 billion, according to the Crypto Briefing website.
The 39-year old Russian tech mogul, who also holds citizenship in France, the UAE and Saint Kitts and Nevis, was detained by French authorities after his private jet landed in Paris on August 24 after flying from Azerbaijan. According to media reports, the entrepreneur is likely to face charges related to Telegram, particularly for allegedly failing to sufficiently moderate the platform and prevent it from being used by criminals.
Telegram, meanwhile, has insisted that it complies with all EU laws and content-moderation policies and has called it “absurd” to suggest that Durov is responsible for the misuse of Telegram by bad actors.
Durov has consistently refused to provide user data to the authorities or install a surveillance “backdoor,” and has spoken publicly about the pressure he has faced from the US.