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Telegram has instructed traders that the detainment of chief govt Pavel Durov by French police has had no “materials influence” on the messaging app’s operations, as monetary disclosures confirmed that the surging worth of its crypto holdings is more and more underpinning its enterprise.
Based on unaudited monetary statements seen by the Monetary Instances, which haven’t been beforehand reported, Telegram reported big beneficial properties within the worth of its digital property within the first half of 2024, which rose to $1.3bn in contrast with practically $400mn on the finish of final yr.
The filings counsel that this rise, along with proceeds it booked from promoting Toncoins — a cryptocurrency with which it has shut ties — and an extra Toncoin-related deal have all helped create a monetary buffer for the Dubai-based firm after it was shaken by Durov’s authorized troubles.
Telegram was rocked in August when its founder was detained by French authorities in Paris. He faces quite a few preliminary charges over Telegram’s alleged failure to handle alleged criminality on the platform. One of many expenses is punishable by as much as 10 years in jail and Durov stays on bail within the nation.
The corporate wrote within the disclosures to traders, that are dated October 22, that the matter “didn’t have a fabric influence on Telegram operations and the group’s enterprise actions”, noting that the allegations had been focusing on its founder relatively than the corporate itself.
Telegram declined to touch upon the disclosures.
Based on its monetary statements, Telegram made $525mn in income within the six months to the tip of June, up 190 per cent from the identical interval in 2023.
Almost half of the income — or $225mn — got here from a one-time take care of an unnamed get together, in response to the paperwork. Underneath the phrases of the deal, Telegram “obtained remuneration” in change for permitting the cryptocurrency Toncoin to be the unique methodology for small companies to purchase promoting on the app. The exclusivity settlement was terminated on October 1, the paperwork stated.
Toncoin was initially developed in-house at Telegram. Nonetheless, it’s now developed by an open-source neighborhood after the venture bumped into regulatory troubles with the US Securities and Change Fee in 2020.
An ecosystem of teams now construct on the Ton blockchain or spend money on Ton-related ventures, a few of which have shut ties to Telegram and Durov.
Telegram stated within the disclosures that it “holds a major amount of Toncoins and is uncovered to modifications in Toncoin market worth”, acknowledging that right here had been volatility within the value since Durov’s detainment. Toncoin is buying and selling about 10 per cent decrease since Durov was detained.
The corporate made $353mn in proceeds from the sale of digital property within the first half of the yr to June, and has bought $348mn in Toncoin since then.
It additionally posted a post-tax revenue of $335mn within the first half of this yr. The figures dwarf the $342mn in revenues that it booked for the total yr of 2023 on losses of $173mn, in an indication that Telegram was on the trail to its first annual revenue previous to Durov’s detainment.
Consultants have warned that Telegram, which is integrated within the British Virgin Islands, might wrestle to herald future promoting revenues given it’s now linked to alleged youngster sexual abuse materials and terrorist content material.
The corporate stated within the disclosures that it “stands behind its practices in content material moderation and co-operation with judicial authorities in strict compliance with the relevant French legal guidelines”, but additionally stated it was upgrading its content material evaluation practices and increasing its moderation crew.
Telegram is totally owned by Durov, who sits on a multibillion-dollar cryptocurrency fortune, however the firm has raised about $2.4bn in debt financing set to mature in 2026. Based on the paperwork, in September 2024 Telegram used part of its total proceeds to purchase again a few of its personal bonds for $124.5mn.
Whereas Telegrams bonds are nonetheless buying and selling under face worth, they’ve recovered from their preliminary sell-of following Durov’s detainment, quoted at 95 cents on the greenback, having plunged as low 87 cents in August.
Chatting with the Monetary Instances earlier this yr, Durov stated Telegram, which solely has about 50 staff, was rising its monetisation efforts by advertisements and subscriptions. This follows the standard enterprise mannequin of rival social media and messaging platforms resembling Meta and X, with the founder suggesting the corporate might float in 2026.
Promoting income roughly doubled to a document $120mn within the first half of the yr whereas premium subscriptions introduced in $119mn, in contrast with $32mn in the identical interval final yr, in response to Telegram’s monetary disclosures.
One particular person accustomed to the matter stated that the corporate had taken benefit of beneficial market circumstances to profitably divest a few of its cryptocurrency reserves.
Nonetheless, the particular person stated that this was tactical and never a part of its longer-term monetisation technique, which remained promoting advertisements and premium subscriptions.
