Toncoin falls 7% as Elon Musk refutes Telegram founder’s claims of a $300 million xAI partnership

Toncoin, the cryptocurrency tied to the Dubai-based messaging app Telegram, tumbled 7% on Thursday after tech billionaire Elon Musk denied news of a $300 million partnership between Telegram and xAI, a Musk-led AI company.

Toncoin jumped 21%, from $3.01 to $3.65, on Wednesday after an announcement by Telegram CEO Pavel Durov that he and Musk had reached an agreement to integrate xAI’s chatbot Grok into the messaging platform.

“This summer, Telegram users will gain access to the best AI technology on the market,” Durov wrote on X. “@elonmusk and I have agreed to a 1-year partnership to bring xAI’s @grok to our billion+ users and integrate it across all Telegram apps.”

According to Durov, Telegram would receive $300 million in cash and equity from xAI, and the messaging platform would keep 50% of the revenue from xAI subscriptions sold on Telegram.

However, details of the partnership soon came into question as Musk contradicted Durov’s claims, writing on X that, “No deal has been signed.” Durov quickly responded to Musk saying that while it was true that the deal had not yet been signed, it was agreed upon “in principle.”

“Formalities are pending,” Durov wrote.

Telegram fans were not impressed by the exchange, with one X user writing: “Agreed in principles doesn’t mean anything.” Another user wrote, “Well you just blew the deal.” After peaking at $3.65, Toncoin fell to a low of $3.26 on Thursday, losing 11% before recovering slightly.

Toncoin is the native token on the The Open Network, or TON. TON is a blockchain that operates as a separate entity from Telegram, but is still associated with the app, allowing the messaging platform’s 1 billion users to pay for games, advertisements and other decentralized applications.

News of the proposed deal comes as Durov announced via Telegram on Thursday that the company has raised $1.7 billion from convertible bonds. A portion of the funds will go toward paying off $955 million of the company’s existing debt, due in 2026, according to Bloomberg.

Earlier this year, Toncoin surged 24% after Durov was permitted to return home to Dubai after being barred from leaving France amid an ongoing investigation. Durov was arrested by French authorities in August on suspicion that Telegram was abetting the distribution of child sexual abuse material, drug trafficking and other criminal activities by users.

This story was originally featured on Fortune.com

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