The Open Network (TON), a blockchain that facilitates payments on the messaging app Telegram, has raised $400 million from prominent venture capital firms in the crypto space including Sequoia Capital, Ribbit Capital, Benchmark Ventures, Kingsway Capital and Draper Associates, the TON foundation announced on Thursday.
TON partners with Telegram to allow over 1 billion users to pay for games, advertisements and other decentralized applications with the blockchain’s native-token, Toncoin. Following the announcement the Toncoin jumped 6%.
“I’ve been a long-time believer in the potential of blockchain to disrupt traditional industries and systems,” Tim Draper, founder of Draper Associates—one of the VCs participating in this round—said in a statement. “TON’s technology is highly impressive, and its integration with Telegram provides it with a distribution that no other blockchain can match.”
The investors who participated received “token-based investments” instead of equity like a traditional funding raise, a TON spokesperson told Fortune. “These VCs are placing their bets on the future success and utility of the TON blockchain, its growing ecosystem, and its potential to provide real-world utility for crypto holdings, especially within Telegram.”
The deal comes as Telegram founder and CEO Pavel Durov was permitted to return home from France earlier this week amid an investigation into his platform. Following a statement on Telegram in which Durov confirmed that he had returned home to Dubai, Toncoin surged 24%.
Durov was previously banned from leaving France after being detained near Paris in August and charged with crimes related to allegedly allowing criminal activity on Telegram. The investigation into Durov and Telegram continues, the founder said in a statement. He will have to return to France by Apr. 7.
Telegram has become known as a messaging platform for people looking for privacy and security. Durov made it the company’s policy to not comply with government requests for information about its users, but reversed that policy shortly after he was arrested. Because of this, the French government alleges that the app has been used for the distribution of child sexual abuse material, drug trafficking, fraud and other criminal activities.
The platform has previously denied these charges, calling it “absurd” to hold Durov personally accountable for actions that occur on the platform. A Telegram spokesperson pointed to a Telegram statement from Durov from September in which he said: “No innovator will ever build new tools if they know they can be personally held responsible for potential abuse of those tools.”
The founder has maintained his innocence throughout the investigation, saying that the company has routinely “exceeded its legal obligations,” when it comes to preventing the platform from being exploited by bad actors.