Toncoin is deeply integrated into the Telegram messaging app for paying creators and developers. Credit: Shutterstock/Muhammad Alimaki.

Telegram founder Pavel Durov’s detention is reverberating through the crypto venture capital (VC) sector, where some of the biggest players have invested in a digital token closely linked to the messaging app. 

More than a dozen companies including Pantera Capital Management, Animoca Brands and Mirana Ventures have invested in Toncoin, whose blockchain is being used on Telegram to handle things like instant payments. 

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Pantera is one of the largest crypto VC funds and is believed to have invested in excess of $100m in Toncoin earlier this year, with the company describing Toncoin as its largest investment, without providing an amount.

Observers believed Telegram would become a digital-asset “super app” similar to China’s WeChat, with the token surging fourfold from February to early July and assets locked on its blockchain, TON, briefly surpassing $1bn. 

Durov’s recent detention after allegations he didn’t do enough to combat crime on Telegram highlight the risks of investing in what is seen as a volatile market. 

Lasse Clausen, founding partner at crypto VC firm 1kx, said: “The majority of the investors thought that obviously the app itself is going to foster and promote, or at least seed, the adoption of the Toncoin network. 

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“Now we have a case where a black swan event happens to the company itself and its founder that might raise some questions about the future.” 

Toncoin experienced a 20% drop after Durov was seized, with the total value lock – an indicator of a blockchain’s use – falling to $573m.  

Those in VC companies who have invested in Toncoin are now looking to see if events will cause users to leave Telegram.

Especially concerning for many investors is the fact that their investments include an agreement not to sell for at least 12 months. 

Fallout in a similar instance occurred in 2022 when Do Kwon’s TerraUSD stablecoin project collapsed, leaving investors including Three Arrows Capital and Jump Crypto with more than $1bn of worthless tokens. 

Three Arrows went bankrupt shortly after the collapse.