Toncoin, the cryptocurrency tied to the Dubai-based messaging app Telegram, tumbled 7% on Thursday after tech billionaire Elon Musk denied information of a $300 million partnership between Telegram and xAI, a Musk-led AI firm.
Toncoin jumped 21%, from $3.01 to $3.65, on Wednesday after an announcement by Telegram CEO Pavel Durov that he and Musk had reached an settlement to combine xAI’s chatbot Grok into the messaging platform.
“This summer, Telegram users will gain access to the best AI technology on the market,” Durov wrote on X. “@elonmusk and I have agreed to a 1-year partnership to bring xAI’s @grok to our billion+ users and integrate it across all Telegram apps.”
In accordance with Durov, Telegram would obtain $300 million in money and fairness from xAI, and the messaging platform would preserve 50% of the income from xAI subscriptions bought on Telegram.
Nevertheless, particulars of the partnership quickly got here into query as Musk contradicted Durov’s claims, writing on X that, “No deal has been signed.” Durov rapidly responded to Musk saying that whereas it was true that the deal had not but been signed, it was agreed upon “in principle.”
“Formalities are pending,” Durov wrote.
Telegram followers weren’t impressed by the change, with one X person writing: “Agreed in principles doesn’t mean anything.” One other person wrote, “Well you just blew the deal.” After peaking at $3.65, Toncoin fell to a low of $3.26 on Thursday, shedding 11% earlier than recovering barely.
Toncoin is the native token on the The Open Community, or TON. TON is a blockchain that operates as a separate entity from Telegram, however continues to be related to the app, permitting the messaging platform’s 1 billion customers to pay for video games, ads and different decentralized functions.
Information of the proposed deal comes as Durov introduced through Telegram on Thursday that the corporate has raised $1.7 billion from convertible bonds. A portion of the funds will go towards paying off $955 million of the corporate’s current debt, due in 2026, based on Bloomberg.
Earlier this 12 months, Toncoin surged 24% after Durov was permitted to return dwelling to Dubai after being barred from leaving France amid an ongoing investigation. Durov was arrested by French authorities in August on suspicion that Telegram was abetting the distribution of kid sexual abuse materials, drug trafficking and different prison actions by customers.
Durov has denied these allegations and maintained his innocence, writing in March, “When it comes to moderation, cooperation, and fighting crime, for years Telegram not only met but exceeded its legal obligations.” Telegram itself has additionally rebutted the claims that it’s answerable for illicit exercise, writing on X within the wake of Durov’s arrest: “It is absurd to claim that a platform or its owner are responsible for abuse of that platform.”
This story was initially featured on Fortune.com
