Is Telegram A Hidden Crypto Player? Digital Asset Holdings Now At $400M

Telegram, the messaging app founded by Pavel Durov, has recently been into the spotlight due to its founder’s arrest in France for allegedly failing to control criminal content on the platform. Moreover, the firm’s significant involvement in the crypto market has caught attention. Financial disclosures reveal that the firm’s digital asset holdings are now valued at $400 million, exceeding cash reserves.

Telegram Crypto Holdings Overview

The company’s 2023 financial report, which was reviewed by PwC’s Dubai branch, shows that the company’s crypto-related revenue is a major contributor to its bottom line. Despite reporting a hefty operating loss of $108 million, the firm generated $342.5 million in revenue last year. Notably, over 40% of this revenue came from crypto-related activities. This includes its integrated wallet and sales of collectibles.

The “integrated wallet,” a new business line for Telegram, has been a particularly significant driver of this revenue. This software program allows users to store, send, receive, and trade crypto assets, with revenue recognized from integrating this wallet into the social media app and providing continuous access. This service is facilitated through non-cash consideration in the form of Toncoin, the native token of the firm’s blockchain project, The Open Network (TON).

Furthermore, the firm’s engagement with digital assets extends beyond its integrated wallet. The company has been actively involved in the sale of collectibles. These include usernames and virtual phone numbers. Whilst, it accepts Toncoin as a mode of payment. These transactions are recorded at fair value, with any gains or losses from digital assets being accounted for through the company’s financial statements.

The 2023 financials also reveal that Telegram’s digital assets, primarily Toncoin, are a significant component of its balance sheet. Valued at nearly $400 million, these assets outshine the company’s cash and cash equivalents, according to a Financial Times report. This substantial holding underscores Telegram’s deep integration into the crypto market.

Toncoin Sale In 2024

Interestingly, the financial report also highlights Telegram’s strategic management of its Toncoin holdings. The company sold a substantial portion of its Toncoin before the recent price downturn. This move has likely mitigated potential losses from the asset’s volatility as they sold around $243.5 million in TON.

Moreover, this proactive approach suggests that the firm is not just a passive player in the crypto market but is actively managing its exposure to ensure financial stability. Meanwhile, Durov’s arrest and the subsequent scrutiny of the firm’s operations have intensified discussions about the company’s role in the crypto world.

The company, fully owned by Durov, has raised over $2.3 billion in convertible bonds from various high-profile investors. These include sovereign wealth funds and tech-focused investors. Despite this, the firm’s substantial operating expenses, of over $450 million raise questions about its valuation, which Durov had earlier pegged at over $30 billion.

The financial documents provide a clear picture of the firm’s commitment to user privacy while balancing its involvement in crypto. Moreover, the firm’s revenue from crypto activities, coupled with its significant digital asset holdings, paints a portrait of Telegram as a major, though somewhat hidden, player in the crypto sector. Durov’s release in France has spread optimism inthe community.