Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Telegram has told investors that the detainment of chief executive Pavel Durov by French police has had no “material impact” on the messaging app’s operations, as financial disclosures showed that the surging value of its crypto holdings is increasingly underpinning its business.
According to unaudited financial statements seen by the Financial Times, which have not been previously reported, Telegram reported huge gains in the value of its digital assets in the first half of 2024, which rose to $1.3bn compared with nearly $400mn at the end of last year.
The filings suggest that this rise, together with proceeds it booked from selling Toncoins — a cryptocurrency with which it has close ties — and a further Toncoin-related deal have all helped create a financial buffer for the Dubai-based company after it was shaken by Durov’s legal troubles.
Telegram was rocked in August when its founder was detained by French authorities in Paris. He faces a number of preliminary charges over Telegram’s alleged failure to address alleged criminality on the platform. One of the charges is punishable by up to 10 years in prison and Durov remains on bail in the country.
The company wrote in the disclosures to investors, which are dated October 22, that the matter “did not have a material impact on Telegram operations and the group’s business activities”, noting that the allegations were targeting its founder rather than the company itself.
Telegram declined to comment on the disclosures.
According to its financial statements, Telegram made $525mn in revenue in the six months to the end of June, up 190 per cent from the same period in 2023.
Nearly half of the revenue — or $225mn — came from a one-time deal with an unnamed party, according to the documents. Under the terms of the deal, Telegram “received remuneration” in exchange for allowing the cryptocurrency Toncoin to be the exclusive method for small businesses to buy advertising on the app. The exclusivity agreement was terminated on October 1, the documents said.
Toncoin was originally developed in-house at Telegram. However, it is now developed by an open-source community after the project ran into regulatory troubles with the US Securities and Exchange Commission in 2020.
An ecosystem of groups now build on the Ton blockchain or invest in Ton-related ventures, some of which have close ties to Telegram and Durov.
Telegram said in the disclosures that it “holds a significant quantity of Toncoins and is exposed to changes in Toncoin market value”, acknowledging that here had been volatility in the price since Durov’s detainment. Toncoin is trading about 10 per cent lower since Durov was detained.
The company made $353mn in proceeds from the sale of digital assets in the first half of the year to June, and has sold $348mn in Toncoin since then.
It also posted a post-tax profit of $335mn in the first half of this year. The figures dwarf the $342mn in revenues that it booked for the full year of 2023 on losses of $173mn, in a sign that Telegram was on the path to its first annual profit prior to Durov’s detainment.
Experts have warned that Telegram, which is incorporated in the British Virgin Islands, could struggle to bring in future advertising revenues given it is now linked to alleged child sexual abuse material and terrorist content.
The company said in the disclosures that it “stands behind its practices in content moderation and co-operation with judicial authorities in strict compliance with the applicable French laws”, but also said it was upgrading its content review practices and expanding its moderation team.
Telegram is fully owned by Durov, who sits on a multibillion-dollar cryptocurrency fortune, but the company has raised about $2.4bn in debt financing set to mature in 2026. According to the documents, in September 2024 Telegram used a part of its overall proceeds to buy back some of its own bonds for $124.5mn.
While Telegrams bonds are still trading below face value, they have recovered from their initial sell-of following Durov’s detainment, quoted at 95 cents on the dollar, having plunged as low 87 cents in August.
Speaking to the Financial Times earlier this year, Durov said Telegram, which only has about 50 employees, was increasing its monetisation efforts through ads and subscriptions. This follows the typical business model of rival social media and messaging platforms such as Meta and X, with the founder suggesting the company could float in 2026.
Advertising revenue roughly doubled to a record $120mn in the first half of the year while premium subscriptions brought in $119mn, compared with $32mn in the same period last year, according to Telegram’s financial disclosures.
One person familiar with the matter said that the company had taken advantage of favourable market conditions to profitably divest some of its cryptocurrency reserves.
However, the person said that this was tactical and not part of its longer-term monetisation strategy, which remained selling ads and premium subscriptions.