Throughout this revived hype, I’ve been wondering: “What about the crime?” Every social network and messaging app (Telegram is both) has issues with illegal content, but Telegram’s are over the top. As most users who have tapped “find people nearby” can tell you, it’s a wretched hive of scum and villainy—drugs, sex, weaponry, and stolen data are all on offer, to say nothing of the hitmen and terrorists.

Telegram, headquartered in Dubai, has plenty of legitimate uses and is a valuable and rare outlet for free speech in totalitarian places like Russia. But many of the services advertised on it are reprehensible and illegal in any jurisdiction. And this is a sound investment why?

Now Telegram’s IPO is looking as distant as ever, following Durov’s arrest in France late Saturday. A French child protection agency called Ofmin issued the arrest warrant and its secretary-general, Jean-Michel Bernigaud, said on LinkedIn that the core issue was “the lack of moderation and cooperation of the platform…particularly in the fight against pedophilia.” French media also reports that Telegram is suspected of effective complicity in drug trafficking, fraud, organized crime, online harassment, and the promotion of terrorism, by virtue of not doing enough to drive these activities off Telegram.

Telegram says Russia-born Durov has nothing to hide, and its “moderation is within industry standards.” It added: “It is absurd to claim that a platform or its owner are responsible for abuse of that platform.” At the time of writing on Monday, Durov was still in questioning; he can be held for up to 96 hours before being either charged or freed.

Elon Musk, Edward Snowden, and others have taken the stance that Durov is being targeted for protecting free speech. “POV: It’s 2030 in Europe and you’re being executed for liking a meme,” tweeted Musk. “I am surprised and deeply saddened that [French President Emmanuel] Macron has descended to the level of taking hostages as a means for gaining access to private communications,” Snowden wrote from Russia.

Whether these hot takes are useful will become clearer once we know more about the specific allegations. If the French authorities are going after Durov because they want to undermine the strong encryption on Telegram’s secret messages, that would indeed be a bad thing that sets dangerous precedents.

However, the illegal services on Telegram are not hidden. A prospective cocaine buyer will initiate an encrypted secret chat to communicate with a dealer, but only after the dealer has advertised those wares openly. Users can report illegal posts to the company, but—judging by the “nearby groups” that I’m seeing here in Berlin—there’s often nothing but illegal posts on display. It’s like the dark web, but not dark.

Telegram’s statement on the arrest specifically referred to its claimed compliance with the EU’s new Digital Services Act, which covers online content. Now, Telegram is not classified as a “very large online platform” under the DSA, which means it doesn’t have to abide by the law’s toughest rules around transparency and accountability. (Musk’s X does have this classification and faces DSA charges over these issues.) But the DSA does still oblige Telegram to tackle illegal content when made aware of it.

But that said, Durov was not arrested for violating the DSA. “The arrest was conducted under French criminal law,” a European Commission spokesperson told me. “Criminal prosecution is not among the potential sanctions for a breach of the DSA. The DSA does not define what is illegal nor does it establish any criminal offence and can therefore not be invoked for arrests. Only national [or international] laws that define a criminal offence can be invoked.”

There’s a lot we still don’t know about this case. But whatever the specifics, it’s probably safe to say that you won’t be adding Telegram shares to your portfolio anytime soon.

More news below.

David Meyer

Want to send thoughts or suggestions to Data Sheet? Drop a line here.

NEWSWORTHY

Uber fine spells trouble. The Dutch data protection authority has fined Uber €290 million ($324 million) for transferring drivers’ personal data to the U.S. without a legal basis, the Associated Press reports. The watchdog says Uber didn’t have a legal justification for the transfers between August 2021 and the end of 2023, meaning it broke the EU’s General Data Protection Regulation. Big Tech lobbyists say this period was a time of great regulatory uncertainty in Europe, and argue that the Dutch decision implies much online activity between the EU and U.S. at the time was illegal.

X stock grants. Workers at Elon Musk’s X must justify their contributions to the firm to get the stock grants they’ve been expecting, according to The Verge. The publication also reports that staff are yet to get their promised annual equity refresher, which was due in April. Considering Musk’s track record with promises, employees are skeptical they will, Fortune reports. Meanwhile, the Guardian reports that some members of the Royal Society—the U.K.’s national academy of sciences—want Musk to lose the fellowship he was granted in 2018, due to his incendiary comments during the country’s recent riots. 

Ephemeral Threads. Meta’s Threads—an X rival—is reportedly testing ephemeral threads with some users. Per TechCrunch, the posts disappear after a day, and can be displayed to a limited set of Threads users.

SIGNIFICANT FIGURES

100%

—The tariffs that Canada will impose on imported Chinese electric vehicles, as announced by Ottawa this morning. This matches the U.S.’s tariffs on EVs from the likes of BYD; the EU’s tariffs are notably lower.

IN CASE YOU MISSED IT

Mike Lynch leaves a complex, still-unfolding legacy, by Allie Garfinkle

Sinking of a super yacht adds to questions billionaire Mike Lynch wanted to put behind him, by Michael Del Castillo

NASA to bring stranded astronauts back on SpaceX capsule, not Boeing Starliner, by Jason Ma

Meta blocked an Iranian hacking network posing as tech support from Microsoft and Google, by the Associated Press

Apple to unveil new iPhones and big upgrades to wearables on Sept. 10, by Bloomberg

BEFORE YOU GO

YC defense tech. Y Combinator is for the first time backing a defense company: cruise missile maker Ares Industries, which promises “a new class of anti-ship cruise missiles…[delivering] the capabilities that the DoD wants in a form factor that’s 10x smaller and 10x cheaper.” The legendary accelerator’s investment, reported by TechCrunch, comes at a time when the tech and defense worlds are bleeding into each other more than ever before.