In the wake of Telegram CEO Pavel Durov’s bombshell arrest in France last weekend and subsequent criminal indictment, much is still uncertain—particularly, how the high-stakes drama will impact Telegram’s massive crypto ambitions.
This year, Telegram became perhaps the most prominent company to ever jump with both feet into the cryptosphere. The dominant messaging service encouraged the proliferation of an ecosystem of on-chain, in-app games and services powered by Telegram’s blockchain of choice, The Open Network (TON). Those so-called “mini apps” exploded in popularity this spring, largely thanks to their ability to earn users crypto rewards via token airdrops.
Momentum from mini app activity catapulted Telegram to a record 950 million monthly active users in July, and Telegram has directly embraced TON by using it to pay channel operators a share of advertising revenue, along with launching an in-app currency called Stars that's linked with TON.
The company’s new path appeared so limitless that some TON developers prophesied the app might soon ride its on-chain mini app model to become the West’s version of China’s “everything app,” WeChat.
Telegram CEO Pavel Durov Indicted, Cannot Leave France
Four days after his airport arrest, Telegram founder Pavel Durov has been formally indicted on multiple charges by French authorities, the latest development in the ongoing investigation into the platform's alleged role in facilitating criminal activities. The Office of the Prosecutor of the Republic in Paris announced Wednesday that the charges against Durov include accusations of enabling the use of his platform for drug trafficking, organized fraud, and the dissemination of pornographic conte...
But crypto is also, notoriously, a legally risky sandbox to play in. So now that Telegram appears to have awoken the regulatory beast, could the company’s crypto future be in jeopardy?
"How big do they want to get?"
The charges filed against Telegram CEO Pavel Durov on Wednesday do not mention cryptocurrency whatsoever. They focus instead on content related to illegal topics like child pornography and drug sales that Durov allegedly allowed to proliferate on his platform.
But the timing of the indictment—in the midst of Telegram’s aggressive push to make crypto-backed financial services a central offering—speaks loudly, according to Seth Goertz, a former U.S. Attorney specializing in cryptocurrency and cybersecurity.
How Crypto Could Help Telegram Become the West's First 'Everything App'
In a matter of months, Telegram-based, crypto-backed mini apps like Notcoin and Hamster Kombat have taken over the world. But one developer building out the blockchain that is closely aligned with Telegram’s crypto endeavors says the messaging app could soon support crypto-backed versions of Uber, Amazon, and almost any other app out there. “This mini app structure and design is just the beginning,” Dr. Awesome Doge, a pseudonymous core developer of The Open Network (TON) and the founder of TONX...
“The more they go down that road, the more they're inviting scrutiny,” Goertz told Decrypt of Telegram’s finance and commerce-related ambitions. “How big do they want to get?”
The former prosecutor specifically pointed to the integration, in April, of the popular stablecoin Tether (USDT) with both TON and the Wallet app on Telegram. While the move was a massive boon for Telegram’s mini apps, allowing users to transact in a dollar-backed currency that doesn’t fluctuate nearly as much as TON’s native token, the stablecoin also has a long track record of fueling illicit activity due to that same attractiveness.
“If governments are seeing large amounts of Tether being moved through Telegram, it is going to attract tremendous scrutiny, for sure,” Goertz said. “The dollar is a powerful thing.”
Telegram Launches TON-Linked 'Stars' Currency After Toncoin Hits All-Time High Price
Making good on a promise made earlier this year, Telegram CEO Pavel Durov announced a new in-app currency on Thursday that will facilitate the purchase of digital goods and services in Telegram mini apps within a crypto-backed ecosystem. The in-app currency, Stars, will be available for purchase with fiat currency through in-app purchases via iOS and Android, or within Telegram itself. Stars can then be used to purchase digital products within Telegram mini apps, like Notcoin and Hamster Kombat...
Decrypt reached out to numerous TON developers and creators of Telegram mini apps for this story regarding their views on Durov’s arrest, and how it might impact the future of Telegram’s crypto-related ambitions. All declined comment.
Telegram did not respond to multiple requests for comment on this story.
Crypto tech vs. crypto attitude
Not everyone is adamant that the factors that compelled the French government to arrest Durov have anything to do with crypto or any other technology peddled by Telegram—potentially indicating that the company’s “everything app” ambitions may not be the center of the story.
Despite this week’s uproar on Crypto Twitter—which framed Durov’s arrest as an assault on user rights to privacy—Ben Rubin, the founder of the once-trendy, since-shuttered video chat app Houseparty, believes Telegram didn’t ruffle many feathers with its actual privacy features.
Telegram Privacy Under Fire as Founder Awaits Trial
Following the arrest of Telegram CEO Pavel Durov in Paris last week, privacy advocates quickly rallied to his defense, with the likes of Proton CEO Andy Yen calling Durov’s arrest “insane.” But in the days since, a rift has opened up among the developers of privacy-focused apps and cryptocurrencies, with some questioning Telegram’s tools for “protecting user privacy.” In a recent interview with WIRED, Meredith Whittaker, president of the secure messaging app Signal, argued that Telegram “doesn't...
In reality, the app is actually less secure by default than other popular messaging platforms with automatic end-to-end encryption like Signal, iMessage, and even WhatsApp.
Crucially, though, Telegram’s leadership is notoriously standoffish when it comes to dealing with government entities. This created a perfect storm, in Rubin’s opinion, with Telegram sitting on lots of vulnerable data about its users, but refusing to hand it over.
“My intuition is that this has nothing to do with crypto,” Rubin told Decrypt. “When a platform not only doesn’t protect user privacy—by not introducing end-to-end encryption—but also pisses off the regulators, you get the situation that you're in now.”
Beyond Telegram: A Look at Alternative Private Messaging Apps
The arrest and indictment of Telegram founder Pavel Durov by French authorities has led to renewed discussion about which messaging app provides the most privacy and protection for users. Despite its massive popularity, many critics say Telegram security is lacking. Government interest in privacy-preserving technology is intense, as criminals have been known to use encrypted applications to conceal their crimes. However, such tools are also vital to journalists, dissidents, and survivors of abus...
In that sense, Telegram and Durov may now be in trouble less due to crypto tech, and more due to embodying the same kind of anti-establishment attitude that has fueled the crypto industry and made Durov something of a free speech icon.
When French prosecutors announced charges against Durov on Wednesday, they specifically underscored how Telegram’s failure to communicate whatsoever with government entities was a crucial factor that aggravated the entire situation.
"This indictment is the result of a thorough investigation into Telegram's near-total lack of response to judicial requests, which has been a concern for multiple law enforcement agencies across Europe,” prosecutor Laure Beccuau said.
‘Hamster Kombat’, Other TON Games Protest Arrest of Telegram CEO Pavel Durov
The developers of prominent Telegram-based crypto games like Hamster Kombat and Notcoin have put out messages and in-game content protesting the late Saturday arrest of Telegram co-founder and CEO Pavel Durov, showing solidarity across games that have collectively attracted hundreds of millions of players. Following news of Durov’s arrest on Saturday, prominent Telegram crypto games began sharing an animated sticker featuring the Telegram app icon to their community channels, which in some cases...
Rubin, who is currently building Towns, a permissionless app for group chats that runs on Ethereum layer-2 network Base, said such conflict could be easily avoided if Telegram adopted an inverse to its current approach: encrypting all user messages automatically, and letting law enforcement in—when necessary—to parse through other more extraneous data.
“This is how you actually find a good balance where the regulators don't have too much access to things, and they cannot abuse the power,” Rubin said.
“But they actually need to do work,” he added of regulators. “And I think we will be in trouble if, for anyone who builds online communication, regulators come and ask to cooperate and we all give them the finger. That’s not going to work out.”
Can TON Even Handle the 'Hamster Kombat' Telegram Game Airdrop?
Telegram tap-to-earn game players got exciting news this week, as the developers of viral crypto game Hamster Kombat announced that the HMSTR token launch is now set for September 26 on The Open Network (TON), following a delay from the original target of July. But that announcement was couched by plenty of less appealing news around the network. Last weekend, Telegram co-founder and CEO Pavel Durov was arrested in France, prompting a price plunge for TON plus uncertainty around the Telegram-lin...
In recent days, Durov’s arrest has become a rallying cry for tech leaders ranging from Elon Musk to prominent crypto investor and former Coinbase CTO Balaji Srinivasan.
Crypto advocates in particular have rushed to the Telegram founder’s defense, framing his prosecution as an existential attack on the foundational pillars of the decentralization movement.
But was it actually groundbreaking crypto tech that so irked the French government in Durov’s case? Or rather, his defiant and dogmatic personification of the crypto persona?
Edited by Andrew Hayward
