Telegram founder Pavel Durov has spoken out for the first time after his August arrest in France. He criticized the authorities for targeting him personally rather than Telegram. Durov also made it clear that Telegram is still fully committed to free speech, even if it means leaving markets that oppose this principle. Meanwhile, Binance founder CZ is banned for life from managing the exchange, and new information surfaced that proves Ryan Salame is linked to an FTX bribery scandal. In the UK, protecting investors seems like an afterthought to many new crypto companies as almost 90% of crypto firms have failed to gain FCA approval in the UK due to insufficient fraud and money laundering controls.
Telegram Founder Breaks Silence
Pavel Durov, the founder of Telegram, has spoken out for the first time since his arrest in France in August. In his public message, Durov shared his surprise at being detained by French authorities, and pointed out that Telegram has a legal representative in France to handle regulatory matters. He also stated that French authorities had several ways to contact him, as he is a French citizen and a regular visitor to the French Consulate in Dubai, which made the arrest unnecessary.
Durov also stated that the company is ready to leave markets that oppose the principles of free speech and expression. He made it very clear that Telegram’s mission is not financially motivated but driven by a desire to protect basic human rights, especially in regions where they are being undermined. Additionally, Durov criticized the decision to charge him personally rather than targeting the company.
Screenshot of Durov’s message (Source: Telegram)
After the arrest, French President Emmanuel Macron denied that the move was politically motivated. However, this statement did little to quell international criticism, which accused French authorities of suppressing free speech. The backlash intensified with calls to release Durov coming from both the TON Society and tech industry leaders.
This situation escalated when Chris Pavlovski, the CEO of Rumble, publicly announced his departure from Europe, and warned that France was becoming unsafe for tech founders advocating free speech. Pavlovski accused French authorities of crossing a red line by targeting those who refuse to censor speech.
CZ Banned from Managing Binance
Other crypto founders are also facing some trouble. Changpeng “CZ” Zhao, the former CEO of Binance, is expected to be released from a U.S. prison in a few weeks. However, his plea deal could permanently prevent him from managing or operating the crypto exchange.
According to a report from Axios, Binance CEO Richard Teng revealed that Zhao was handed a lifetime ban from overseeing the company, contrary to earlier reports suggesting the ban would only last three years. Although the plea agreements of both CZ and Binance did not explicitly require this ban, the exchange confirmed that Zhao is not allowed to hold a management role.
In November of 2023, U.S. authorities reached a $4.3 billion settlement with Binance, during which Zhao pleaded guilty to a felony charge of violating the Bank Secrecy Act. He was sentenced to four months in prison and is expected to be released on Sept. 29. As part of the agreement, Zhao stepped down as CEO and was replaced by Richard Teng.
At the time, Zhao shared that he plans to remain available to the Binance team in an advisory capacity, but still stepped down from his leadership role to allow the company to move forward.
Binance’s plea agreement was filed on Nov. 21, and outlined that Zhao was barred from involvement in managing or operating the exchange, though this was presented as a “consideration” for prosecutors rather than a mandatory legal measure. As part of the settlement, Zhao was also required to personally pay $50 million to U.S. regulators. Binance’s legal battle with the U.S. Securities and Exchange Commission (SEC) is still ongoing.
Ryan Salame Linked to FTX Bribery Scandal
Meanwhile, United States prosecutors have linked former FTX Digital Markets co-CEO Ryan Salame to accounts using the names of Thai prostitutes as part of efforts to unfreeze funds tied to FTX and Alameda Research. In a Sept. 5 filing in the U.S. District Court for the Southern District of New York, prosecutors opposed Salame’s motion to vacate his guilty plea regarding campaign finance violations.
Despite Salame withdrawing his petition on Aug. 29, a hearing will be held on Sept. 12 to address the matter. The prosecutors described Salame’s petition as ”shameless and self-serving” and lacking merit. They also claim he made false assertions to evade sentencing.
Salame’s involvement in the case includes allegations tied to a broader scandal involving former FTX CEO Sam Bankman-Fried, who allegedly bribed Chinese officials to unfreeze Alameda funds locked in exchanges. Prosecutors claimed Salame played a role by opening accounts using the identities of Thai prostitutes to facilitate the unfreezing of funds. During Bankman-Fried’s trial, former Alameda CEO Caroline Ellison testified that a $150 million bribe was paid to unlock $1 billion in funds frozen on Chinese exchanges in 2021.
Salame initially filed his petition to vacate his guilty plea after authorities revealed that they will investigate his partner, Michelle Bond, who is a former Republican congressional candidate. Prosecutors made it clear that resolving Salame’s case would not affect Bond’s, who faces four charges related to campaign finance violations.
Salame pleaded guilty to conspiracy to operate an unlicensed money transmitting business and campaign finance fraud in September of 2023, and ended up receiving a 90-month prison sentence. He is scheduled to report on Oct. 13.
Bankman-Fried was sentenced to 25 years in prison, and has filed an appeal. Other key people who are involved in the case, including Nishad Singh and Gary Wang, are still awaiting sentencing.
Nearly 90% of Crypto Firms Fail FCA Approval in the UK
In the past year, almost 90% of crypto firms that tried to register in the United Kingdom failed to meet the required standards set by the Financial Conduct Authority (FCA). The FCA’s 2024 annual report revealed that these firms struggled to gain approval because of very weak fraud protection and money laundering controls. The regulator rejected or refused over 87% of the applications, mainly due to insufficient anti-money laundering protocols.
Out of 35 total applications for crypto firm registration, only four were approved by the FCA. Fifteen applications were withdrawn, and nine were rejected. The FCA pointed out that some submissions lacked very crucial components, which made it impossible to conduct proper assessments.
(Source: FCA)
Additionally, the regulator is also trying to finalize a new financial promotion framework from June 2023 to ensure that crypto-related advertisements in the UK are clear and not misleading.
The FCA also saw that there has been an increase in public awareness about potential crypto scams. In 2024, 63% of consumer calls about scams were made before people invested in questionable projects. This is a 5% increase compared to the previous year.
However, some experts suggest that crypto firms may increasingly look outside of the UK to establish their operations. International law firm Reed Smith warned that the slow processing times and the lack of political support for crypto applications might drive companies abroad.
On average, it has taken 459 days for the FCA to process a crypto firm’s registration over the last three years. 186 applications were withdrawn in that period. Reed Smith partner Brett Hillis pointed out that these delays could seriously undermine London’s competitiveness in the crypto sector.
This article was originally Posted on Coinpaper.com
