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Telegram CEO’s Arrest Is Unlikely to Be the Last: Galaxy

Aug 26, 2024
    The first major arrest of a prominent messaging or social media company CEO may not be the last, Galaxy said.Telegram and Durov were probably resisting takedown or information requests, the report said.Some of the charges could be linked to Telegram’s integration with TON or the blockchain’s presumed use in illegal activity, Galaxy said.

As a seasoned analyst with years of experience in the tech and crypto industries, I find myself increasingly concerned about the recent detention of Telegram CEO Pavel Durov. This event marks a significant turning point in the regulatory landscape for messaging apps and blockchain technologies.

The initial detainment of Telegram’s CEO, Pavel Durov, in France marks a significant apprehension of a high-profile head of a messaging or social media company due to insufficient moderation of their platform. Experts at Galaxy Research predict that this may not be an isolated incident; further arrests are likely to occur as stated in their report published on Monday.

For a while now, governments have displayed an unfavorable stance towards cryptography and encryption, as observed in a recent report following the detention of Durov during the weekend.

It’s possible that Telegram and Durov were opposing orders or data requests, possibly from European authorities, particularly the French government, according to Galaxy’s statement. Notably, Telegram has ties with The Open Network (TON), a blockchain, which was initially an in-house project at the platform but later transitioned into the hands of independent developers when it was discontinued by the original team.
According to Alex Thorn, who leads research at Galaxy, it’s unclear if the allegations against Pavel relate directly to TON, or if they involve Telegram’s connections with the TON system.
The digital currency known as TON, which is tied to the TON blockchain (previously called the Telegram Open Network), experienced a drop of more than 14% due to news from French media outlets about Durov’s alleged detention at Le Bourget Airport.
As an analyst, I’ve been considering a scenario where some allegations related to ‘fraudulent activities’ or ‘money laundering’ may potentially be associated with the integration of Telegram with TON, or the usage of TON in illicit activities, as suggested by Thorn’s statement.
TON, the blockchain network, boasts over 350 validators worldwide; however, it’s uncertain if any of these are controlled by Telegram. Consequently, it remains unclear how TON would respond if France or other significant governments were to target it in relation to Durov’s arrest, potentially aiming to disrupt it.
Galaxy noted that TON‘s value is substantially dependent on its integration with the messaging app.
The degree to which TON (or any other blockchain) can steer clear of associations with Durov and Telegram, as well as how other blockchains can prevent being implicated in aiding criminal activities, is largely influenced by their level of decentralization, according to the report.

As a researcher, I am following the developments regarding Durov’s case closely. According to French prosecutors, there is a possibility that he could be freed as early as Wednesday. However, the betting platform Polymarket seems skeptical about his release this month, as they are betting against an release before the end of September.

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2024-08-27 14:23