Telegram CEO Pavel Durov was arrested by French authorities in Paris last month with 12 potential charges to be laid upon him. These charges include complicity in illegal acts which includes things such as distribution of child pornography, the sale of narcotics, and organized fraud.
Though Durov has already stated that he will cooperate with authorities and doesn’t think he should be held responsible for users’ actions on the platform, there is obvious concern that Toncoin (TON), the crypto asset on Telegram, will be affected by the situation.
Negative Price Action Already Abound
It didn’t take long for Toncoin’s price to experience a negative reaction to Durov’s arrest, as TON dropped from $6.84 USD to $5.11 within 48 hours. Over the next week of price action TON fell to about $4.50, with many of the other major assets on the TON Network, such as Notcoin (NOT) and GAMEE (GMEE) falling even larger percentages than the nearly 25% that TON has lost since Durov’s arrest.
At this time this article was published Toncoin was trading around $5.39 a unit so it has recovered significantly since Durov’s arrest.
Toncoin Separate From Telegram?
Toncoin (TON) was originally a project offered directly from Telegram in 2018. TON was originally branded under the name GRAM. The GRAM project had raised $1.7 billion in seed funding before the SEC intervened and forced Telegram to repay $1.2 billion to investors, which is still ongoing.
Telegram abandoned the project, which was then taken over by The Open Network (TON) Foundation, who launched the blockchain. How legitimate the TON Network really is is hard to say, as we’ve done some research on the network previously. However, the arrest of Durov has nothing to do specifically with TON, and the asset is simply responding to news related to the company with which the asset operates.
Small Rebound for TON
Toncoin has somewhat rebounded from its lows following Durov’s arrest, and has climbed back up above $5 a piece. Durov is no longer in custody but has been indicted and will eventually face judges, though the invesgation’s timeline is still unclear.
Closing Thoughts
The arrest of Durov is an interesting one, much like the arrest of the former Silk Road creator, Durov has been arrested and charged based upon how users have used his platform, not for specific actions done by himself.
That former precedent may hold weight when Durov faces trial, but it’s similarly interesting for how decentralized platforms may face legal action in future as well.
