Telegram Speed Dates a Bad Actor: Pavel Durov and Judgment or Lack Thereof
February 5, 2025
Another non smart software write up from a real, authentic dinobaby.
Pavel Durov has had a rocky start to 2025. He may have about 100 loving children. He has his brother Nikolai’s support. He has pals from his days at VKontakte. And he has new friends from the French judiciary urging him to embrace some opportunities for freedom. That private jet is waiting. The sunny skies of Dubai beckon.
But another decision may come to haunt him. Telegram and the TON Foundation’s BFF has been busted. According to the US Attorney for the Southern District of New York, one of the outfits shepherding the Ku Group and its KuCoin operations said, “Yep, we are guilty of unlicensed money transmitting business.”
As a dinobaby, I think the statement in “KuCoin Pleads Guilty to Unlicensed Money Transmission Charge and Agres to Pay Penalties Totaling Nearly $300 Million” means in rural Kentucky speak something like “money laundering.” The official news release explains:
U.S. Attorney Danielle R. Sassoon said: “For years, KuCoin avoided implementing required anti-money laundering policies designed to identify criminal actors and prevent illicit transactions. As a result, KuCoin was used to facilitate billions of dollars’ worth of suspicious transactions and to transmit potentially criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes. Today’s guilty plea and penalties show the cost of refusing to follow these laws and allowing unlawful activity to continue.”
Pavel Durov’s proxy outfit the Open Network Foundation showcased Ku Group at the November 2024 Gateway Conference in Dubai. Ku Group’s then-CEO (apparently not called out in the official statement issued on January 27, 2025, by the southern district) sparkled with optimism about the tie up between the owner of the Messenger mini app and the Peken Global Limited / Ku Group operation.
The news release points out:
KuCoin was founded in or about September 2017. Since its founding in 2017, KuCoin has become one of the largest global cryptocurrency exchange platforms, with more than 30 million customers and billions of dollars’ worth of cryptocurrency in daily trading volume. Between in or about September 2017 and in or about March 2024, the date of the Indictment, KuCoin served approximately 1.5 million registered users who were located in the U.S., and earned at least approximately $184.5 million in fees from those U.S. registered users.
Some of Ku Group’s services included, according to the official AG statement placing:
orders for spot trades in cryptocurrencies, including Bitcoin, Ethereum, and others, and orders for derivative products, including futures contracts, tied to the value of Bitcoin and other cryptocurrencies. As a result of its operation of this business, KuCoin has, at all relevant times, been a money transmitting business required to register with FinCEN and reported suspicious transactions.
The November BFF moments between Ku Group and Telegram’s proxy organization make clear that the Messenger app is a clever and versatile technology system. It is also now clear that the intent of some of Telegram’s announcements is possibly going against the established financial systems methods of serving their customers.
For now, Chun (Michael) Gan and Ke (Eric) Tang have suffered a set back. Will the Peken Global and Ku Group disappear? Possibly. However, the Ku Group’s and Telegram’s vision of a Web3 financial services entity is likely to thrive. Will the French judiciary amp up their discussions with Pavel Durov? Will the United Arab Emirates take a closer look at the Telegram operation which has a nominal headquarters in Dubai? Will the Swiss authorities pay a visit to the TON Foundation’s office in Zug, Switzerland? Will bad actors change their ways of hiding money in digital form?
Good questions. I think the French are on the job. The other entities may be reluctant to rock the good ship Telegram too much more. Could those folks have a vision for a financial system cut loose from traditional ways to do money business?
My thought is that BRICS, Russia, China, and some influential people have a goal. Telegram and the Ku Group were players, not leaders.
Stephen E Arnold, January 5, 2025
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