The tech world erupted Saturday when Telegram founder and CEO Parel Durov was arrested in Paris. The move could have far-reaching implications for leaders of other social media companies also as authorities globally try to strike a fine balance between rising instances of hate speeches and criminal activities on these networks while trying to protect free speech.

French authorities arrested Durov from the Le Bourget airport north of Paris, over alleged offenses linked to Telegram. Notably, France’s OFMIN, which was formed in November only, had issued an arrest warrant for Durov over allegations of organized crime. His detention was reportedly extended on Sunday and could last for another 96 hours.

No one knows why Durov chose to fly to France from Azerbaijan despite an arrest warrant against him but his friends and family seem to be in shock.

Telegram has Been the Flagbearer of Free Speech

Much before Elon Musk proclaimed himself a “free speech absolutist” in 2022 (even as many of his actions have suggested otherwise), Telegram has been the flagbearer of free speech. For many of its over 900 million users who live in countries with authoritarian regimes (or who are in war-torn regions), Telegram has been nothing short of a lifesaver. The platform is also quite popular among cryptocurrency investors.

However, while lax moderation on Telegram has helped support free speech, it has its own share of problems. The platform is quite popular among cybercriminals, drug sellers, terrorist organizations, weapons dealers, fraudsters, traffickers, and far-right extremist groups. Telegram has been on the radar of several law enforcement agencies over what they believe is the company’s failure to curb booming illegal activities through its network.

Meanwhile, many leading personalities including Robert F. Kennedy Jr., Edward Snowden, Tucker Carlson, and Elon Musk have called for Durov’s release terming the arrest as an assault on free speech.

 

What Happens to Telegram After Durov’s Arrest

Telegram has also lashed out at France for arresting Durov and said that he “has nothing to hide and travels frequently in Europe.” The company stressed that “It is absurd to claim that a platform or its owner are responsible for abuse of that platform.”

Telegram’s fate, especially in Europe, is hanging in the balance after Durov’s arrest. Georgy Lobushkin, former head of PR at VKontakte (VK), which Durov founded, said, “Nobody was prepared for this situation.” Responding to whether he worries about Telegram’s future, Lobushkin said, “[I] worry a lot.”

Notably, as a founder CEO who calls the shots at Telegram, Durov’s arrest does pose a significant challenge for the messaging app and is the typical “keyman risk” that such companies carry.

Telegram only has a few dozen employees and according to Elies Campo, who directed Telegram’s growth, business, and partnerships between 2015 to 2021, Durov made all the payments including for critical infrastructure.

“So, what’s going to happen when there needs to be some payments for infrastructure providers, or providers in terms of connectivity—and he’s still under arrest?” wondered Campo.

There are also long-term implications as France would force Telegram to provide encryption keys to decrypt messages which would be difficult for the company as it has positioned itself as a “private” messaging platform.

For now, though Telegram is working normally for users even as Durov’s arrest has brought the free speech versus online disinformation and criminal activity debate back into focus.

EU Has Also Been Critical of Elon Musk

Some experts have even suggested that other social media platforms like X (formerly Twitter) and even its owner, Elon Musk, could be at risk. Pretty much ever since Musk bought the platform in 2022, it has been at odds with the EU over content moderation. The European Commission believes that X is not complying with its DSA (Digital Services Act). Musk meanwhile asserts that the Commission wants it to censor free speech to escape fines.

https://x.com/elonmusk/status/1811783320839008381?lang=en

Durov’s arrest could have long-term implications as it might open the gates for other business leaders to be arrested over allegations related to the companies they lead. This could perhaps even include Musk, who has been at odds with European regulators but visits the continent often, given Tesla’s business operations in the region.

However, unlike Telegram, X seems to acquiesce to government warrants and requests. The EU just feels like X’s content moderation is severely lacking. It’s much more likely that X receives a fine under the DSA than any kind of criminal action.

Durov Left Russia in 2014

In 2006, shortly after he graduated from the University of Saint Petersburg, Durov founded the social network VKontakte. It was a Facebook-lookalike platform in Russia, and earned him the nickname “Russia’s Mark Zuckerberg.”

In 2013, Durov and his bother Nikolai founded Telegram. However, in 2014 he quit VK and left Russia after the country demanded the company hand over the data of Ukrainian users. He also reportedly did not block the account of now-deceased Russian leader Alexei Navalny as Russian authorities wanted.

Durov then immigrated to Saint Kitts and Nevis and gained citizenship status there. He then subsequently received a French and also holds UAE citizenship where he shifted Telegram to.

While Durov left Russia a decade back, some allege that he and Telegram still have ties to the Kremlin – an allegation that he has described as “inaccurate.”

Meanwhile, after his arrest, the Russian embassy in France said that it had “immediately asked the French authorities for clarification of the reasons and demanded to ensure the protection of his rights and provide consular access.”

Telegram Is Considering a Listing Soon

Notably, unlike most other startup companies that opt for equity financing from venture capital companies, Telegram opted for debt financing through convertible notes. Those holding its senior unsecured debt have the option to convert their investment into equity at a discount between 10%-20% to the IPO price. However, Telegram has to list before March 31, 2026, for that conditionality to be met.

Telegram is also considering adding an artificial intelligence (AI) chatbot and in an interview, Durov admitted that a small equity raise is an option that it could consider for that endeavor.

In that interview with the Financial Times, Durov said, Telegram has “been offered US$30 billion-plus valuations” from multiple suitors, including “global late-stage tech funds.” However, he prefers to list the company instead of selling it to another company.

“The main reason why we started to monetise is because we wanted to remain independent,” said Durov. He added, “Generally speaking, we see value in [an IPO] as a means to democratise access to Telegram’s value.”

Naturally, Durov’s arrest has put a question mark on not only Telegram’s short-term outlook but also the sustainability of its business model in the long term. While platforms like Telegram and TikTok have emerged as strong alternatives to traditional media, especially for getting updates on contentious issues like the Russia-Ukraine war, and Israel-Hamas conflict, they have also been in the crosshairs of regulators.

While the US government has invoked national security and TikTok’s alleged ties to China to propose a ban on the short video app, many believe that the country is trying to clamp down on a platform that has helped propagate some unpopular views about the Middle East conflict.