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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 Occasions, which haven’t been beforehand reported, Telegram reported enormous 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 additional 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 a lot of preliminary charges over Telegram’s alleged failure to deal with 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 cloth influence on Telegram operations and the group’s enterprise actions”, noting that the allegations had been focusing on its founder fairly 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 top 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 cope with an unnamed celebration, in response to the paperwork. Below the phrases of the deal, Telegram “acquired remuneration” in trade 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 mentioned.
Toncoin was initially developed in-house at Telegram. Nevertheless, it’s now developed by an open-source group after the challenge bumped into regulatory troubles with the US Securities and Alternate 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 mentioned within the disclosures that it “holds a big amount of Toncoins and is uncovered to modifications in Toncoin market worth”, acknowledging that right here had been volatility within the worth 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 battle to herald future promoting revenues given it’s now linked to alleged little one sexual abuse materials and terrorist content material.
The corporate mentioned 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 in addition mentioned it was upgrading its content material assessment practices and increasing its moderation crew.
Telegram is absolutely 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 beneath 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.
Talking to the Monetary Occasions earlier this yr, Durov mentioned Telegram, which solely has about 50 staff, was growing its monetisation efforts by adverts and subscriptions. This follows the standard enterprise mannequin of rival social media and messaging platforms reminiscent of Meta and X, with the founder suggesting the corporate might float in 2026.
Promoting income roughly doubled to a report $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 individual acquainted with the matter mentioned that the corporate had taken benefit of beneficial market circumstances to profitably divest a few of its cryptocurrency reserves.
Nevertheless, the individual mentioned that this was tactical and never a part of its longer-term monetisation technique, which remained promoting adverts and premium subscriptions.
