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Telegram CEO Pavel Durov is turning to be a crypto ‘Black Swan event’ says crypto VC, but traders are more concerned over a market crash. By Varinder Singh 1 day ago Updated 22 hours ago
Highlights
- Telegram and CEO Pavel Durov facing multiple charges and investigations in EU countries.
- Telegram CEO Pavel Durov saga impacting the crypto venture capital sector.
- European Union probing potential breach of the Digital Services Act (DSA).
- Toncoin price jumps after two outages in 24 hours.
Telegram CEO Pavel Durov is now facing multiple charges in other countries as the saga unfolds into bigger risks for crypto investors, raising risks of another crypto ‘Black Swan Event’. After France indicted Durov and banned him from leaving the country, reports of alleged crimes and investigations on Telegram and its CEO are surfacing.
Crypto Investors and VC Firms Affected by Telegram Saga
The detention of Telegram CEO Pavel Durov is impacting the crypto venture capital sector, reported Bloomberg on August 29. The crypto market has also faced a crash-like situation after Durov’s arrest despite the global outcry on free speech and support for his release.
Crypto venture capital firms Pantera Capital Management, Animoca Brands, and Mirana Ventures are among the biggest investors in Toncoin. Notably, Pantera has put more than $100 million into Toncoin earlier this year, according to people familiar with the matter. The Open Network blockchain is used on Telegram to handle things like instant payments, ads, and other services.
“The majority of the investors thought that obviously the app itself is going to foster and promote, or at least seed, the adoption of the Toncoin network,” said Lasse Clausen, founding partner at crypto VC firm 1kx. “Now we have a case where a black swan event happens to the company itself and its founder — that might raise some questions about the future.”
A Black Swan Event in crypto is an unexpected occurrence that significantly impacts the market. Brad Garlinghouse, CEO of Ripple Labs, in an interview with Chris Vasquez, host of World Class Podcast, said Tether could be the next Black Swan event in the crypto market.
Pavel Durov Charges and Telegram Investigation
Telegram CEO Pavel Durov preliminary charges by a court in France for allowing alleged criminal activity on his messaging app. He was released on a €5 million ($5.5 million) bail, but barred from leaving the country to report the police twice a week.
Telegram is investigating in India over concerns that the messaging app is being used for criminal activities such as extortion and gambling. Moreover, the Indonesian government plans to block Telegram due to wide-spread pornographic content and online gambling.
The app is also under investigation by the European Union for potentially breaching digital rules by underreporting user numbers, as required by the Digital Services Act (DSA).
Also, Forbes reported that Durov is also facing an unrelated criminal complaint of child abuse in Switzerland. The case was filed by his former partner Irina Bolgar. She also alleged that Durov stopped paying her 150,000 euros ($167,500) per month in child support, as per court filings.
Is it a Crypto Black Swan Event?
TON blockchain by Telegram faced two block production disruptions in a day, which is claimed to be related to Dogs token minting. The Pavel Durov saga led to heavy loads on the network as the company ran campaigns to seek global support for the release of Durov. TON-based Resistance Dog (REDO) token rallied over 100% amid the campaigns.
Block production on TON experiencing disruption
Beginning 19:19 UTC.Appears to be due to heavy load attributed to DOGS token minting. TON Core is working on a solution.
We will continue to update you on the situation as it evolves. User cryptoassets are not at risk.
— TON Status (@ToncoinStatus) August 28, 2024
Currently, the concerns over a market crash have grown among investors due to TON blockchain outages and investigations by the EU and other countries. However, some crypto venture capital firms do not consider it as potential Black Swan event. The recent crypto market crash has turned traders more cautious.
As per CoinGape analysis, Toncoin price is facing bearish pressure, but the price can surpass the $8 level on favorable news. TON price is currently trading at $5.60, moving sideways after an over 5% jump following Pavel Durov’s release.