Telegram’s Crypto Revenue Soars Despite Pavel Durov’s Arrest

Pavel Durov, the Russian billionaire behind Telegram, is embroiled in controversy after being arrested in France over allegations that he failed to manage criminal content on the messaging platform.

Financial records obtained by FT reveal that cryptocurrency activities have become a major revenue stream for Telegram, surpassing its traditional messaging service. The company’s 2023 financials show that Telegram Group, based in the British Virgin Islands with a key subsidiary in the UAE, generated $342.5 million in revenue last year but also incurred a $108 million operating loss.

An analysis of the profit and loss statement, signed by Durov and audited by the Dubai branch in April, highlights the critical role digital assets play in Telegram’s finances. Specifically, “gains from revaluation of digital assets” added $86 million to other comprehensive income.

The revenue breakdown further emphasizes Telegram’s shift towards crypto, with its “integrated wallet” and “collectibles sale” — both recent additions — now making up over 40% of its total revenue.

Telegram’s balance sheet also shows the company’s strong focus on cryptocurrencies, with digital assets valued at roughly $400 million, significantly outweighing its cash reserves.

The financial statements’ related party transactions section shows that Durov has invested heavily in Telegram’s future. Last year, he purchased $64 million in convertible bonds and spent $300,000 worth of Toncoin on Telegram Premium subscriptions through a raffle.