- Toncoin tumbles after Musk denies Telegram partnership, reversing a sharp 15% gain.
- Elon Musk has officially stepped down as the Head of the Department of Government Efficiency (DOGE).
The much-publicized Telegram partnership with Elon Musk’s xAI has hit a snag. The partnership reportedly included plans to bring the Grok chatbot to its platform. Notably, the unexpected twist caused Toncoin, the cryptocurrency tied to Telegram’s ecosystem, to drop after an earlier surge.
Elon Musk Shuts Down Talk of Telegram Agreement
On May 28, Telegram founder Pavel Durov announced that the messaging platform would soon integrate Grok, a chatbot developed by Elon Musk’s xAI. This marked Telegram’s second major update this month. As noted earlier, the company confirmed that Ethena Labs’ USDe stablecoin had been fully integrated into the platform to enable smooth crypto transactions.
It is worth noting that the announcement proposed a revenue-sharing arrangement with xAI, valued at $300 million in cash and equity. The deal would also allow Telegram to earn from xAI subscriptions within the app. However, the momentum was short-lived. Just hours later, Elon Musk responded on X, formerly Twitter, saying that no deal had been signed.
This public denial from Musk created immediate confusion, and Telegram users and the crypto market reacted quickly. Following the pushback, Durov admitted that the agreement was not official, saying it was only an agreement in principle and that final steps were still pending.
Despite Musk’s denial, Durov has not taken down the original announcement post. This has led many to believe that talks may still be ongoing, even if formal documents have not been signed yet.
As we covered in a recent post, the price of Toncoin surged after the announcement of Grok integration with Telegram. Current news shows that Toncoin saw a sharp rise after the announcement of the partnership with Elon Musk’s xAI. It jumped 15% to $3.70, with trading volumes crossing $1.1 billion.
However, following the lack of clarity around the deal, Toncoin gave up much of its gains and began to dip. The mixed signals from both sides have left investors uncertain. Currently, Toncoin is trading at $3.35, down by 6.75%.
Telegram’s $1.5 Billion Raise Adds to the Drama Around Toncoin
Adding to the unfolding situation, Telegram recently raised $1.5 billion by issuing bonds to BlackRock and other investors. The funds will be used to settle older debt linked to a 2021 bond, which matures in March 2024.
This funding news was overshadowed by the confusion surrounding the xAI deal. While the fundraising shows confidence in Telegram’s business model, the timing of the announcement, along with the Toncoin price swing, has created a volatile atmosphere.
Musk also announced his departure from the Department of Government Efficiency, expressing gratitude to President Donald Trump. He served in the department for 130 days, starting from when the President was inaugurated.
In addition, this development comes after Vivek Ramaswamy, the former presidential candidate and entrepreneur, stepped down from his role as a DOGE leader. As highlighted in our earlier report from January, Ramaswamy resigned to focus on his bid for the Ohio governor’s seat.
As reported in a CNF news piece, Elon Musk clarified during his time in the department that the Department of Government Efficiency has no ties to Dogecoin or cryptocurrency-related initiatives.
While unrelated to the Telegram matter, the timing added to the day’s headlines. With no clear confirmation on the partnership, all eyes remain on whether Telegram and xAI will finalize the Grok integration. For now, the uncertainty continues to weigh on Toncoin’s market performance.
