Telegram CEO Pavel Durov's current legal challenges are being viewed by some as a potential 'Black Swan event' that could pose significant risks to the crypto market. This raises questions about whether investors are facing the threat of a market crash.
Durov is facing multiple charges in various European countries, creating growing concerns among crypto investors. Following an indictment in France, which has also imposed a travel ban on him, additional allegations and investigations involving Telegram and its CEO have come to light.
Impact on Crypto Investors and Venture Capital Firms
The arrest of Pavel Durov has notably affected the crypto venture capital sector, with Bloomberg reporting on August 29 that the market experienced crash-like conditions. This situation has provoked a significant response, emphasizing the importance of free speech and support for Durov's release.
Major crypto venture capital firms, including Pantera Capital Management, Animoca Brands, and Mirana Ventures, are heavily invested in Toncoin. Pantera, for example, invested over $100 million in Toncoin earlier this year. The Open Network blockchain, used by Telegram for instant payments, advertisements, and other services, is now under scrutiny.
Lasse Clausen, a founding partner at crypto VC firm 1kx, remarked, "Most investors believed that the app would naturally promote the adoption of the Toncoin network. However, this unforeseen event involving the company and its founder raises questions about the future."
Legal Troubles for Pavel Durov and Telegram
Durov has been preliminarily charged in France for allegedly enabling criminal activities on Telegram. He was released on a âŹ5 million ($5.5 million) bail but must report to the police twice a week and cannot leave the country.
In India, Telegram is under investigation for potential involvement in criminal activities, including extortion and gambling. The European Union is also investigating the app for possibly underreporting user numbers, violating the Digital Services Act (DSA).
Additionally, Forbes reported that Durov faces unrelated criminal charges of child abuse in Switzerland, filed by his former partner Irina Bolgar, who claims Durov stopped paying her âŹ150,000 ($167,500) per month in child support.
Potential Crypto Market Crash?
The TON blockchain, associated with Telegram, experienced two block production disruptions in a single day, linked to the minting of Dogs tokens. The heightened activity on the network, driven by campaigns supporting Durov's release, led to these disruptions. Amid these efforts, the TON-based Resistance Dog (REDO) token surged over 100%.
Investor concerns about a market crash have intensified due to the TON blockchain's outages and ongoing investigations by the EU and other countries. The recent crypto market instability has made traders increasingly cautious.
According to careful analysis, the Toncoin price is currently under bearish pressure but could surpass the $8 level with favorable developments. Presently, the $TON price is trading at $5.58, showing a sideways movement after a 4% increase following Durov's release.
