This weekend, something both absurd and inevitable happened in the tech and crypto world: Pavel Durov, the founder of Telegram and The Open Network (TON), <a href="https://www.reuters.com/world/europe/telegram-messaging-app-ceo-pavel-durov-arrested-france-tf1-tv-says-2024-08-24/">was arrested</a> in France. The charges? Vaguely worded moderation issues on Telegram that local authorities have somehow construed as "abetting." If I were Zuckerberg, I'd keep my European vacation plans on hold. Given that the details are still fuzzy, let’s skip the legalese and leave the courtroom drama for later. Rushing to conclusions is not our style—let’s leave that to the tabloids.
But since The Church has a bit of skin in the TON game, and I sense some confusion wafting through the Congregation, I took it upon myself to escape to the smoking room, where all great insights are born. Here’s the unofficial, but possibly more accurate, take.
<h3>Free Speech Parade</h3>
We’ve seen the usual suspects—Musk, Vitalik, and other tech luminaries—rush to Durov’s defense, waving the banner of free speech. But, let’s be real, no one’s really trying to censor Telegram here. This situation is more like one of those Russian nesting dolls—every layer you open reveals a new complication.
In one of his rare interviews, Pavel casually dropped a Slavic folk joke about choosing between two rather unpleasant chairs. It’s not just idle talk; it’s practically a manifesto for a man who’s made a career out of tightrope walking between regulatory compliance and outright defiance. This tells you a lot about his worldview, or at least the one he wants us to believe he has: living on the edge, teetering between boldness and recklessness. It’s the kind of philosophy that wins the hearts of teenage fans and catches the eye of wallets among risk-hungry investors.
<h3>The Two Chairs Dilemma: From Piracy to Privacy</h3>
Let’s rewind a bit. Did you know <a href="https://en.wikipedia.org/wiki/Pavel_Durov">Pavel</a> is a philologist by training? Yes, you heard that right—a guy who studied languages and literature somehow ended up running one of the most controversial tech companies in the world. The real tech genius? That’s his brother <a href="https://en.wikipedia.org/wiki/Nikolai_Durov">Nikolai</a>, who’s a programming genius. While other entrepreneurs go on epic quests to find their Woz, Pavel was born with one. Nikolai’s the one behind all the technical wizardry, while Pavel handles the public-facing drama.
Theirs first taste of success came with <a href="https://en.wikipedia.org/wiki/VK_(service)">VKontakte</a>, the Russian Facebook clone. Ex-empoyees say that VK took off because, well, it was the pirate bay of social media—music, movies, and, yes, even the stuff you wouldn't want your mother to find on your hard drive. All without the hassle of paying for it. For a long time, they got away with this thanks to "respectable" investors in the cap table, who now prefer to rebrand as <a href="https://en.wikipedia.org/wiki/Mikhael_Mirilashvili">philanthropists</a>. You know, the kind who conveniently forget where their first million came from.
And it seems Pavel learned his lesson well. Fast forward, and Pavel took that same playbook and applied it to his next venture—Telegram messenger. This time, the rallying cry was uncensored, secure communication. And it worked. Telegram quickly became the go-to platform for anyone who values their privacy—or, as the Twitter joke goes, for anyone looking to buy drugs or trade crypto. Subtle, right?
But behind every joke, there’s a grain of truth, and Pavel’s built his empire on that grain—turning it into a mountain of intrigue, speculation, and a little bit of paranoia.
<h3>The Bigger the Money, the Bigger the Problems</h3>
As Pavel transitioned from the Russian cozy market to the broader global stage, he discovered that with great power comes great headaches. Enter the ICO saga—a textbook example of how things can go awry when you’re playing with the big boys.
The ICO for his blockchain, <a href="https://en.wikipedia.org/wiki/The_Open_Network">The Open Network</a> was supposed to be his crowning achievement, a digital gold rush that would put him on par with the tech titans. They raised a total of $<a href="https://www.sec.gov/Archives/edgar/data/1729650/000095017218000060/xslFormDX01/primary_doc.xml">1.7 billion</a>, making it the world’s largest initial coin offering to date. Instead, let’s be honest, it was about as well-prepared as a college student cramming for finals after a three-day bender. Leading to a showdown with the SEC and a messy legal ballet of converting tokens into bonds and refunding investors.
The result? Pavel found himself plugging liquidity holes for certain royal family members from the Middle East. And just like that, his team was packing their bags for Dubai.
Now, don’t get me wrong—I have nothing but respect for the investors from the Emirates. But let’s be real, their track record for championing free speech isn’t exactly the stuff of legends. And if you’re looking for benchmarks of uncensored communication, you might want to adjust your expectations.
<h3>What if The Role is To Play The Role</h3>
You’ve got to give credit where it’s due—Pavel Durov is a marketing maestro. He’s not just selling a messaging app; he’s selling a lifestyle, a philosophy, a rebellion against the forces of censorship and control. His very public spat with Russian officials over the Telegram ban was pure theater. Half of Russia’s internet went down in the hunt for our elusive hero, which, if nothing else, gave him plenty of material for his next tweet. And who could forget his jabs at WhatsApp, accusing it of being as secure as a screen door?
Then there’s his personal brand. Oh, it’s meticulously crafted. Picture this: a young, attractive philosopher, the kind of guy who looks like he walked out of a Renaissance painting (or GQ photoshoot), only with a smartphone in one hand and a copy of "Thus Spoke Zarathustra" in the other. He’s the poster child for ascetic living—think fasting, minimalism, and a wardrobe that wouldn’t look out of place in a dystopian sci-fi movie. Health and wellness? Check. He’s the guy who makes intermittent fasting sound like a spiritual journey, not just a trendy diet. The whole package screams “enlightened tech savant,” someone who’s not just creating apps but building a better world.
So, yeah, it’s easy to see how one might think that last weekend’s arrest was just a case of the big bad authorities picking on a modern-day Robin Hood. But, as we like to say, not so fast.
But here’s the thing: our Congregation is great because we’ve got people everywhere who can confirm or debunk what’s floating around in public.
You see, in the industry, Pavel’s reputation is a bit more...nuanced. Or, to put it bluntly, he’s got a reputation as a world-class faker. And that’s not just idle gossip—his former colleagues will vouch for it. Trusting Pavel’s words? Not recommended.
From his fake appearance (no judgment here), to the (ex-)wife and <a href="https://www.instagram.com/missbolgar">three kids</a>, to his taste for the finer things in life. And his willingness to <a href="https://brazilian.report/liveblog/politics-insider/2023/05/10/supreme-court-brazil-telegram/">play ball with local censors</a>, to his free-speech HQ in a place famous for making inconvenient problems disappear, and as the cherry on top—suspicions of direct ties with intelligence services—Pavel might know the informal rules of the game better than most of us, thanks to some well-placed allies. His personal life is as meticulously crafted as his public image. As a result, it’s like watching a magician perform: you’re dazzled by the show, but you know there’s something going on behind the scenes that you’re not supposed to see.
<h3>The Predictable Finale</h3>
So here we are, at what feels like the inevitable climax of Pavel Durov’s long-running drama. Arrest? Sure, why not. It’s almost like these stories all follow the same script. The real twist isn’t in the outcome but in how gracefully you manage your exit: Do you stoically accept your fate? Do you vanish into the welcoming arms of some totalitarian regime, trading freedom for safety? Or, if you’re truly playing the long game, do you end up delivering a TED Talk titled "Ask Forgiveness, Not Permission." Whether this was part of the master plan or just the universe having a laugh? Your guess is as good as mine.
But let’s be real: this is just another episode in the ongoing series that is Pavel Durov’s life—a show where the plot is as predictable as a Netflix original. We know the public script by heart: Pavel will play the wronged hero, his defenders will decry the injustice, and the authorities will stick to their tried-and-true lines. But what’s actually being said in those interrogation rooms? That’s the stuff of mystery novels and, let’s be honest, probably a lot more interesting than the public theatrics. Given Pavel’s track record, it’s hard to believe he didn’t anticipate this twist. He had to know this was coming, and he likely had his responses rehearsed. But let’s not get lost in conspiracy theories—it’s too easy, and frankly, not as much fun as the real story.
<h3>The Bet</h3>
And now, the part you’ve all been waiting for: the investment angle. Let’s be honest—no one bought TON because they were sold on free speech, secure messaging, or even Pavel’s enigmatic leadership. No, we bought it because Pavel dangled a billion-user carrot in front of us. And now, with his arrest—whether it’s a genuine crisis or just the latest act in the Durov drama—Telegram’s download numbers are probably going to go through the roof. If anything, chaos is great for user acquisition.
But here’s the thing: until we see some actual legal action and get a clearer picture of where this circus is headed, the risks are through the roof—maybe even off the charts. Sure, the potential upside looks as tempting as ever, but with great reward comes even greater risk, and that’s a gamble you’ll have to make on your own. Let’s be clear: this isn’t investment advice—this is more like a front-row seat at the world’s weirdest horse race.
The one thing you need to be clear about: this is not a bet on Pavel now. It’s a wager on the diplomatic finesse of his Gulf backers. Will they be handled as delicately as they are when buying up European football clubs? Or is the real game something else entirely, with this crypto project just a pawn in a much bigger negotiation? Or maybe—just maybe—this whole drama is about scoring better terms on those convertible notes? Nobody knows.
In any case, let’s hope Pavel trades his current accommodations for something more comfortable and gets back online soon. After all, it’s much easier to send signals to the market—and to market maker—through a private, uncensored messenger than through a squadron of lawyers, right? We’ll be eagerly awaiting those signals, because let’s be real—our hero might have a habit of walking the tightrope, but he’s never misled us... except, of course, when he has.
<hr class="hrHigh">
UPDATE 26/08/2024 8:00 PM, PARIS — So it turns out the official charges are pretty serious—<a href="https://www.tribunal-de-paris.justice.fr/sites/default/files/2024-08/2024-08-26%20-%20CP%20TELEGRAM%20.pdf">12 counts</a>, to be exact. Looks like the first round of negotiations didn’t go quite as planned. This show’s going to have a long run. Time to stock up on popcorn.
UPDATE 30/08/2024 5:00 AM, WEB2 — The Financial Times <a href="https://www.ft.com/content/429f9092-5447-4e4c-b3b6-ffa2bc357ca4">has revealed</a> some of Telegram's financial figures:
<blockquote>
Telegram’s 2023 financial statements, seen by the Financial Times and not previously reported, show that the company made $342mn in revenues last year on an operating loss of $108mn. Total losses stood at around $173mn after tax.
Durov told the Financial Times in March he was pushing forward with IPO plans, after rebuffing approaches from potential investors who he said gave the Dubai-based company “$30bn-plus valuations”. [...] The company has raised about $2.4bn in debt financing set to mature in 2026. This includes a $1bn bond offering in 2021 where Abu Dhabi state funds were among the investors. Most recently, $330mn was secured earlier this year in an issue Durov has said was oversubscribed.
Under the terms, Telegram’s bondholders will be able to convert the senior unsecured debt into equity at a discount to Telegram’s IPO price if a listing takes place before the end of March 2026 — an incentive for the company to list before that date.
[...] The company is closely associated with Toncoin, a cryptocurrency that was initially developed by the Telegram team and drew in individual and institutional Russian investors, among others.
In 2023, Telegram’s financial losses were partially offset by an appreciation of the digital assets it holds on its balance sheet, which were worth nearly $400mn that year in total. Meanwhile, in 2024, the company also sold Toncoins for over $244mn in cash, financial documents show.
</blockquote>
This is some pretty intriguing stuff, if you ask me.
Analysts, of course, are doing what they do best: speculating. “Would investors buy into an IPO if they’re not sure Telegram’s a pariah? I don’t know.” But let’s be real, we’ll leave that drama for the tabloids.

Choosing Between Two Chairs Show

In the wild world of DeFi, where money is just code and leveraged ponzi schemes are a way of life, sometimes things go a bit... sideways. And we find ourselves once again with a tale as old as time. Well, as old as 2008 at least. It's a story of leverage, liquidity, and a romantic twist between crypto whales.
Today's protagonist in this ever-entertaining crypto soap opera is Kujira. For those unfamiliar, Kujira is the cool kid on the DeFi block, known for crafting DeFi tools so elegant, they have to close-source them.
<h3>The Setup: Leverage, thy name is Trouble</h3>
Imagine you're at a casino. Not just any casino, but a DeFi casino where the chips are fake money, the stakes are high, and the house... well, the house decided to join the game. That's essentially what happened when Kujira decided to spice things up by leveraging their Foundation treasury positions. Because why manage other people's money when you can gamble with it, right?
Spoiler alert: The market didn't get the memo about Kujira's preferred direction and decided to take a different route. Suddenly, the borrowed liquidity <a href="https://x.com/rarma_/status/1818917616188375172">found itself trapped in a hostage situation</a> of a margin call. Oops.
But here's the kicker - this wasn't just any old leverage. It wasn't just Kujira's play money. Oh no, this was leverage built on the hopes, dreams, and, more importantly, the funds of their users. It's like borrowing your friend's car to enter a demolition derby - exciting, sure, but with a high probability of awkward conversations afterwards.
<h3>The Dilemma: To Liquidate or Not to Liquidate</h3>
So, what's a DeFi protocol to do when faced with such a crossroads? Option A: Liquidate the position and face the music (a sad trombone, to be precise). Option B: Orchestrate a bailout, because nothing says "decentralized finance" quite like a good old-fashioned rescue operation.
Option C, beloved by what our narrator colorfully describes as "devcels from the cosmos circus" - try the time-honored governance tradition of the community pool money grab - was off the table. Kujira, bless their hearts, had already told that particular brand of financial "decentralized" gymnastics to take a hike long ago. How very punk rock of them.
In a move that surprised absolutely no one who's been paying attention, Kujira <a href="https://x.com/teamkujira/status/1819717451350777870">went for Option B</a>. Because in crypto, we don't do boring – we do bailouts with style.
Now, here's where it gets interesting. While their community was busy practicing their best "The Scream" impressions, the Kujira team showed Crisis Management 101. They reassured the public with all the calm of a zen master, hinting that white knights were queuing up to help, checkbooks at the ready. It was crisis management so smooth, like watching a swan glide across a lake – all serene on the surface, while those little webbed feet were probably paddling like crazy underneath.
<h3>Enter the Aussie Hero</h3>
While the community was busy debating the merits of a bailout with all the inherent calm and rationality of CT threads, enter stage left: <a href="https://www.jpthor.com/">JP Thor</a>, the eccentric Australian founder of Thorchain, industry heavyweight, and self-proclaimed "cosmos OG", riding in on his proverbial white kangaroo to save the day.
Thor, in a move that would make even the most daring corporate raider raise an eyebrow, <a href="https://x.com/jpthor/status/1820177654332465553">offered to provide his own liquidity</a> to solve Kujira's problem.
<img alt="" src="/img/newsroom/2024/kujira_penetration_thor_tweet.png">
The details of the deal are about as clear as the recipe for Coca-Cola, but we're told it's a "<a href="https://winkhub.app/posts/kujira-recovery-plan-thorchain-partnership">strategic partnership</a>". Thor gets access to Kujira's brilliant DeFi tech and their enviable community, and Kujira gets a lifeline to Thor's apparently bottomless pockets of liquidity.
The only question left hanging is just how deep did the Aussie penetrate Kujira's cap table? Kujira, formerly proud of its independence from VCs, might now find itself with an unexpected bedfellow. But in DeFi, as in life, debtors can't be choosers.
<h3>The Not-So-Hidden Lessons</h3>
Because every crisis is a learning opportunity, what pearls of wisdom can we extract from this drama?
<ol>
<li>
Reputation is the new collateral: When your track record isn't littered with scams, rug pulls, and community pool misuse, people actually want to keep doing business with you. Who knew? Sure, everyone makes mistakes, but it's the quality of those mistakes that counts. In Kujira's case, their past good behavior seems to have earned them a "Get Out of Leverage Jail Free" card.
</li>
<li>
Cool under pressure is the new hotness: While everyone else was running around like headless chickens, Kujira's team kept their composure tighter than their smart contracts. In an industry where "crisis management" usually means deleting your Twitter account, this is refreshingly adult.
</li>
<li>
Don't bite off more risk than you can chew: It's an age-old truth, but apparently one that bears repeating in the DeFi world. Because in crypto, if you're not living on the edge, you're taking up too much space, right? But the cliff you're moving over may be too deep. Yes, your sterling reputation might help you weather a crisis, but the price tag on that weather-proofing could be steeper than FTX's debt.
</li>
</ol>
<h3>The Moral of the Story</h3>
In conclusion, whether Kujira emerges from this adventure smelling like a rose or with a slight whiff of singed fur remains to be seen. But one thing's for certain - in the world of DeFi, where every day is a new episode of "The Hunger Games", Kujira has just written a chapter for the history books.
If you're still reading this for investment tips (insert obligatory DYOR disclaimer here), I have a bridge in Brooklyn to sell you. So, if "follow the money" is still a thing (and when isn't it?), and if one can signal to the market with transactions, well... let's just say I voted for increasing The Church's Kujira allocation.
But remember, I'm just a guy writing a newsletter, not your financial advisor. Be sure, in the world of DeFi, it's not about the destination – it's about the friends you liquidate along the way. Stay safe out there, kids. Now, if you'll excuse me, I need to go check if my leveraged positions are still solvent. Wish me luck!
<hr class="hrHigh">
UPDATE 13/08/2024, SMOKING ROOM — An alternative opinion has been published: <a href="/newsroom/opinion/risk-management-101-keeping-powder-dry">RISK MANAGEMENT 101: KEEPING POWDER DRY</a>

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Choosing Between Two Chairs Show

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