Telegram's CEO Is Using Bitcoin to Bypass Russia's App Ban

Telegram founder Pavel Durov said Tuesday that he has been paying network administrators in bitcoin to bypass a government ban on his popular messaging platform.

The messaging app's creator announced Tuesday in his Telegram channel that he had created bitcoin grants for administrators running virtual private networks (VPNs) and other proxy services to allow users access to the platform after the Russian government blacklisted Telegram for refusing to share private messages. That ban went into effect last week, and as reported this week by local media outlets, the government is doing all it can — such as blocking millions of IP addresses — in an attempt to stop people from using Telegram.

While losing Russia-based users — estimated at 7 percent of Telegram's total base — would not have a long-term negative impact on the app, Durov said «it is important for me personally to make sure we do everything we can for our Russian users.»

He explained:

«I started giving out bitcoin grants to individuals and companies who run socks5 proxies and VPN. I am happy to donate millions of dollars this year to this cause, and hope that other people will follow. I called this Digital Resistance — a decentralized movement standing for digital freedoms and progress globally.»

The decision came after internet service providers began banning Telegram on Monday, he said. Though it has been in place for more than 24 hours, the service has not seen any significant drop in usage, partly due to existing VPN and proxy services, and also because third-party cloud services which are allowing users to connect to the platform.

Telegram's ban may be lifted if the company turns over its encryption keys to the nation's security agencies, according to Durov. However, he added that «we promised our users 100 [percent] privacy and would rather cease to exist than violate this promise.»

The company is notably raising funds in what could be the largest initial coin offering (ICO) to date. The company has reportedly collected $1.7 billion as of today and intends to create its own decentralized ecosystem using the funds, as previously reported.

Russian Police Arrest Two for Illegal Crypto Mining

Russian police arrested two people for running an illegal cryptocurrency mining operation on Thursday.

Ministry of Internal Affairs spokeswoman Irina Volk said police detained two individuals in connection with a cryptocurrency mining farm discovered in an abandoned rubber factory. Authorities found more than 6,000 pieces of mining equipment at the site in the city of Orenburg, according to a Russian media report.

The police are charging two former factory employees with property damage, among other criminal offenses, according to the report.

According to Russian media reports, rumors of the mining farm emerged in early March, but police declined to confirm its existence. However, Volk indicated earlier today that the farm stole 8 million kW/h worth of electricity at an estimated cost of 60 million rubles (about $1 million).

This is not the first time the Russian authorities have shut down illicit crypto mining operations. In February, police arrested several scientists working at a nuclear weapons research institute for using the facility's supercomputers for mining.

Clandestine mining operations have also cropped up in other locations, with employees from an Australian weather reporting agency, New York's Department of Education and Louisiana's attorney general's office all allegedly misappropriating resources to mine cryptocurrencies.