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The cryptocurrency sector witnessed a notable decline in the market value of Toncoin, a digital asset associated with The Open Network (TON), following the reported detention of Telegram Messenger LLP's co-founder. Toncoin's market capitalization decreased by approximately $2.7 billion, reflecting a more than 20% drop after Pavel Durov, Telegram’s CEO, was allegedly taken into custody at a Paris airport. The token recovered slightly but remained down by over 16%, trading at $5.58 by Monday afternoon in London.
Toncoin’s Market Impact and Background
The TON blockchain, which is closely connected to Telegram through a partnership, aims to offer services such as in-app payments and gaming to Telegram’s 900 million monthly users. Despite claims from the three-year-old foundation behind TON that it operates independently from Telegram, the association has made TON one of the most prominent initiatives in the cryptocurrency industry. In May, Pantera Capital Management LP highlighted its acquisition of Toncoin as the firm's largest investment to date.
Durov, who is also Telegram’s CEO, manages the Dubai-based company, which has asserted compliance with European regulations, including the Digital Services Act. Telegram issued a statement asserting that Durov has "nothing to hide" following his detention.
Future Implications and Community Response
The long-term effects of Durov’s detention on Telegram and TON remain uncertain. According to Richard Galvin, co-founder of hedge fund DACM, which acquired TON tokens earlier in 2023, the market has already factored in this uncertainty into Toncoin's price. Galvin also emphasized the importance of the TON-Telegram relationship in introducing Telegram’s extensive user base to cryptocurrency functionality.
The incident has sparked varied reactions, with some critics highlighting Telegram's approach to content moderation, while others praise it as a platform for open discussion. TON's official social media account, along with other prominent figures like Elon Musk, expressed support for Durov by sharing hashtags and changing its logo.
As of now, the value of assets on the TON blockchain has seen a decline, dropping from a peak of $1.1 billion last month to $667 million. Toncoin's price had tripled over the past year, bringing its current market value to around $14.4 billion.
