Telegram CEO Pavel Durov’s Bail Causes Polymarket Bettors $270K Loss

Coinspeaker
Telegram CEO Pavel Durov’s Bail Causes Polymarket Bettors $270K Loss

Pavel Durov, CEO of Telegram, has been released on bail by French authorities as of Wednesday, sending a wave of joy to the crypto community. However, this early release has resulted in a major loss for participants on Polymarket, a crypto-based prediction platform, with missed winnings totaling $270,000.

Durov, the Franco-Russian billionaire, was arrested on August 25 at Paris’s Bourget Airport, accused of facilitating criminal activities through Telegram. Authorities claim that the platform was used by criminals for planning and communication.

Telegram has strongly defended itself, dismissing these allegations as baseless. The platform insists that it cannot be held liable for the misuse of its services by third parties. According to Telegram, its encryption and privacy features are designed to protect user data, not to abet criminal activity.

After being formally indicted, Durov secured his release by posting a substantial bond of around $5.6 million. As part of his bail conditions, he must report to the police twice a week and remain in France.

This swift release caught many Polymarket bettors off guard, as the general expectation was that Durov would face a prolonged detention. At one point, predictions for an August release were around 25%.

Many had believed that French authorities would seek to keep Durov in custody for as long as possible, given his wealth and multiple nationalities, including citizenship in the United Arab Emirates, a country known for its refusal to extradite its citizens. As a result, the probability of release by September-end was estimated at 75%-90%.

Notably, just before the announcement of his bail, the probability of an August release surged to 50%. Bettors who had wagered against an early release saw their predictions fall flat, resulting in major financial losses.

On Polymarket, bettors place wagers on binary outcomes, with each share paying out $1 in Circle’s USDC, if the prediction is accurate. In this case, those who bet against Durov’s early release collectively missed out on $270,000.

Despite his release, the market appears confident that Durov will comply with his bail conditions. A separate contract gives him only a 6% chance of fleeing France by mid-September.

Meanwhile, Telegram’s blockchain network, The Open Network (TON), faced its own challenges this week, experiencing two outages in quick succession. The disruptions were attributed to the high volume of DOGS token transactions.

Notably, the TON network has since been restored, and its native token, Toncoin (TON), has seen a modest increase in value. At the time of writing, Toncoin is trading at around $5.6, up 3% in the past 24 hours. The cryptocurrency saw a notable 10% spike in its value shortly before the news of Durov’s release broke later on Wednesday.next

Telegram CEO Pavel Durov’s Bail Causes Polymarket Bettors $270K Loss