What the Telegram Founder’s Case Means for Tech Startups

Pavel Durov’s return flight to the UAE from Azerbaijan did not go as planned.

When Durov, the 39-year-old founder of Telegram, was detained at Paris’s Bourget Airport on Saturday, it reignited an international debate about the legal and ethical challenges tech startups face in balancing user privacy with compliance to international laws. 

He was released on Wednesday with a bail set at $5.56 million (€5 million). Durov is required to remain in France under judicial supervision and must report to the police twice a week, according to CNN.

Now under formal investigation by French judicial authorities, Durov is barred from leaving the country, facing accusations that Telegram enabled illegal activities, including complicity in organized crime, money laundering, and failing to provide information to authorities. 

His arrest has intensified scrutiny of Telegram’s content moderation practices, raising critical questions about the responsibilities of tech platforms in preventing or facilitating illegal activities.

While some tech founders and investors like Elon Musk and Sequoia Capital’s Shaun Maguire leapt to Durov’s defense and hailed him as a “hero” of free speech, the platform’s legacy and relationship with the Russian government is more complex. 

Telegram at a Glance

Since Durov founded the messaging platform in 2013, it has seen explosive growth over the years. With over 700 million active users as of 2024, Telegram has become a crucial communication tool for millions, largely due to its promise of privacy and resistance to censorship. 

Notably, Telegram has achieved this success without relying on venture capital funding, a rare feat in the tech world.

Earlier this year, Durov told Financial Times the platform was making “hundreds of millions of dollars” from ads business.

Durov’s decision to keep Telegram independent has allowed him to maintain full control over the platform, but it has also made the company more vulnerable to regulatory scrutiny and legal challenges.

While it’s trailing other messaging and social media platforms in the U.S., Telegram has been popular in many emerging markets, including Brazil and India. In 2024, Telegram was only the sixth most popular app in the U.S., behind Facebook Messenger, Google Messages, WhatsApp, Snapchat and Discord.

Crypto Links

The value of Toncoin, the cryptocurrency linked to Telegram, has dropped over 20% since the arrest of Telegram founder Pavel Durov on Saturday. Toncoin is the native token of The Open Network blockchain initially developed by Pavel Durov and his brother, fell from around $6.80 to $5.42. 

Over two years ago, The Open Network (TON) announced its integration with Telegram, enabling users to send Toncoin directly within chats. That feature enabled fee-free transactions without the need for wallet addresses or confirmation waits. 

The TON Society, the blockchain’s official community group, condemned Durov’s arrest, labeling it a “direct assault on the freedom of expression” and urged French authorities to respect Telegram’s rights to protect user privacy and freedom of speech

Increasing Regulatory Scrutiny

Based in Dubai, clearly Durov felt he didn’t have to play by the same rules social media platforms had to follow in the U.S. and Europe.

In recent years, European lawmakers have become increasingly uneasy about the platform’s moderation practices, user data and responsiveness. 

Plus, it was increasingly becoming a major source of disinformation. A 2022 UNESCO study found that nearly half  of Holocaust-related content on Telegram involved denial or distortion, a higher percentage than on platforms like Twitter, TikTok or Facebook.

And still, Durov prided himself on having a lean team structure of only 30 full-time employees, explaining in an interview with Tucker Carlson this April that the engineers he hired were “the best of the best,” and so didn’t need hundreds of people employed by other social media companies focused on moderation of content.

Telegram’s CEO Pavel Durov has nothing to hide and travels frequently in Europe.

US Tech Founders and Investors Leap to His Defense

In the wake of Durov’s indictment, many in the tech community have rallied to his defense. US tech founders and investors, such as Shaun Maguire, have taken to social media to hail him as a free speech hero. They argue that Durov’s resistance to governmental pressure is a necessary stance in an era where tech platforms are increasingly expected to act as gatekeepers of information. This support underscores the broader debate about the role of tech companies in balancing user privacy with the need to combat illegal activities.

“Most people have this story upside down, Durov is a hero,” Sequoia Capital’s Shaun Maguire wrote in a lengthy post on X on Aug. 26.

Telegram’s Legacy and Allegiances: Not So Straightforward

Even though some US tech journalists speculate that the Kremlin does not have access to Telegram’s so-called “backdoor,” the platform is widely used by the Russian government for propaganda dissemination. 

After Facebook was banned in Russia, Telegram became the primary communication channel for Russian officials. Additionally, Telegram has become a critical tool for the Russian military, particularly in the context of the war in Ukraine. Despite its base in Dubai, the app remains integral to Moscow’s communication strategy, raising questions about its true allegiances.

Durov’s Ties to Russia: A Complicated History

Contrary to the image of Durov as a principled opponent of the Kremlin, investigative reports have revealed a more nuanced picture. 

According to independent news platform Vazhnye Istorii (Important Stories), Durov has visited Russia more than 50 times since his emigration, including on the day that Russian authorities announced they would stop blocking Telegram. This pattern of visits, often coinciding with significant developments in Russia’s tech and political landscape, may suggest that Durov’s relationship with his homeland is more complex than he has publicly acknowledged.

What Does the Case Mean for Tech Startups?

Durov’s case is a cautionary tale for tech startups about the risks of operating in a globalized world where legal and political pressures can arise from multiple directions. 

For startups, the key takeaway is the importance of balancing innovation and privacy with compliance and cooperation with authorities. Durov’s ongoing legal battle may set precedents that will influence the tech industry for years to come.

As WIRED pointed out, “Durov is the first of his generation of founders behind major social media platforms to face such severe consequences. What happens next will carry lessons for them all.” 

The last message Durov posted on his Telegram channel on August 14, just days before his arrest, Durov reflected on both his personal journey and the evolution of his platform. He wrote, “When I turned 11 in 1995, I made a promise to myself to become smarter, stronger and freer every day. Today Telegram turns 11 years old, and it’s ready to make the same commitment.”

Following their CEO’s arrest, Telegram dismissed the preliminary charges in a statement on X, saying that the company adheres to EU laws, including the Digital Services Act, and that its moderation practices are in line with industry standards.

“It is absurd to claim that a platform or its owner are responsible for abuse of that platform,” the company said.

As of this week, that’s a claim that Durov–and probably other tech founders–will have to work harder to argue going forward.