The French authorities presented the charges against Pavel Durov, co-founder of Telegram. Durov is charged with complicity in multiple criminal activities, as well as failing to provide cryptographic access in accordance with authority demands.
The case against Telegram’s founder, Pavel Durov, hinges on complicity in several types of crimes, which are considered to be happening through Telegram. The initial charge is providing a platform that creates conditions for illicit transactions between organized groups.
Durov has also refused to supply authorities with documentation to intercept messages and has been charged with providing cryptographic services without the necessary compliance. Telegram offers end-to-end encryption for messages, though most channels also function as openly accessible social media.
The charges do not mention the lack of moderators on Telegram channels. Durov has been charged with providing cryptographic services without proper disclosure.
French authorities mention unspecified “cryptology tools”
Three of the charges against Durov mention the usage of “cryptology tools” in an unauthorized manner. This has left even blockchain developers a bit confused, as the authority language can also apply to all digital asset transactions. Lyudmila Kozlovska, President of the Open Dialogue Foundation, believes some of the charges can target the usage of math-based security.
Most probably, the charges refer to Telegram’s native end-to-end encryption. This type of encryption is not banned in Europe, but authorities can request an investigation and the handing over of encryption keys.
French regulation is also particular about the usage of cryptography, as it is a regulated field. Offering unusual and unregistered forms of cryptography may clash with the regulations of the French digital security authorities.
France allows the use of cryptography for usual services that include protection or authentication but not for unauthorized apps or activities. Any novel use of cryptography must be declared or specifically authorized. For commercial operations, the specific disclosure requirements may vary for every app. France has enforced these rules since 2004 and banned all electronic types of cryptography until 1999.
Pavel Durov does not supply wallet services, which are the domain of third parties. However, Telegram does include native support of the wallet tech, which is key to all bot, sniping, copy-trading, and meme token activities.
Telegram works as an informal fintech app
Despite EU regulations, the problem with Telegram may not lie in the lack of moderators or the spreading of dubiously-sourced news. Telegram is integrated with the TON wallet, and is further supplied with significant liquidity in both bridged and native Tether (USDT).
The stablecoin has long been suspected as a tool to circumvent sanctions. In years past, USDT was one of the tools to circumvent capital controls in China.
For crypto analysts, the real reason behind the charges is the ability to use Telegram as a P2P payment and trading hub. On Toncoin, there are more than $619M in native USDT, which can also be used to pay for gas fees. Another 110M USDT is authorized but not yet issued on the Toncoin platform.
The presence of USDT matches one of the charges against Durov for facilitating money laundering. The charges do not specifically mention the provision of wallets or a blockchain. Telegram is currently divided technologically from the Toncoin project and its related infrastructure, which has been handed over to the community. However, the integration with the chat app remains an important tool for daily activity.
The usage of USDT has accelerated since May 2024, a much shorter time frame compared to allegations against Telegram on illicit activities. The printing of native USDT only accelerated during the 2024 bull market and coincided with the spread of tap-to-earn games.
The partnership between Telegram’s Pavel Durov and Tether’s Paolo Ardoino started during the Dubai 2049 conference. Since then, both issuance and usage of USDT accelerated, and reached as much as $437M on some of the most active days. At the same time, token trading on the Toncoin chain often exceeds $1.6B in 24 hours and is mostly happening on DEXs and is fully unregulated.
The announcement of Durov’s charges also extended the downward pressure on TON, the native asset of the Toncoin chain. TON consolidated around $5.37, still down more than 21% in the past week. TON trades on highly speculative open interest, as the coin reflects the negative news around Telegram.
At the same time, the DOGS token launch is moving forward, raising both transaction count and token-trading numbers for the Toncoin chain. The DOGS token is still in price discovery, trading at $0.0013.
Cryptopolitan reporting by Hristina Vasileva
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