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Russian Court Bans Telegram on Heels of $1.7 Billion ICO

Last Updated March 4, 2021 5:06 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:06 PM

A Russian court has levied an official ban against messaging app Telegram, just weeks after its initial coin offering (ICO) presale raised nearly $2 billion in two private funding rounds.

Tagansky court judge Yuliya Smolina ruled against Telegram  on Friday, siding with communications regulator Roskomnadzor’s request for the authorization to block access to the app on the grounds that the company had refused to comply with local laws.

Intelligence officials with the FSB Federal Security service had repeatedly demanded that Telegram hand over its encryption keys, which would have allowed them to view messages stored in encrypted chats between users. They claimed that they needed access to these keys so they could thwart terrorist attacks.

However, Telegram said that the request was an affront to user privacy and refused to comply, leading to Friday’s court ruling.

Telegram founder Pavel Durov said in response to the ruling that the company would endeavor to bypass the ban, using in-app methods to evade the block, which could go into effect at any time. Users may need a VPN to ensure continued access to the app.

“The power that local governments have over IT corporations is based on money. At any given moment, a government can crash their stocks by threatening to block revenue streams from its markets and thus force these companies to do strange things (remember how last year Apple moved iCloud servers to China),” Durov wrote on his public channel. “At Telegram, we have the luxury of not caring about revenue streams or ad sales. Privacy is not for sale, and human rights should not be compromised out of fear or greed.”

An estimated 9.5 million of Telegram’s 200 million global users live in Russia.

As CCN.com reported, the company recently concluded the second round of its ICO presale, which has thus far been held through a private placement. The company has raised $1.7 billion to create the Telegram Open Network (TON), a blockchain ecosystem with a native cryptocurrency called Gram. It is unclear whether the company will proceed with a public ICO or conclude its offering following the record-setting presale.

Iran, another authoritarian country in which Telegram is popular, is also reportedly mulling a ban on the app, with officials citing its transition into “an economic platform” that will “undermine the national currency of Iran” as justification for its censorship.

Featured image from Shutterstock.