Telegram is facing a tough year financially despite bringing in $342.5 million in revenue for 2023 as it also reported an operating loss of $108 million.

This news comes hot on the heels of Pavel Durov’s arrest in France, where he’s accused of not doing enough to control illegal content on the platform.

With free speech debates raging, the financial figures paint a picture of a company increasingly reliant on cryptocurrency to keep the lights on.

Telegram’s financials, recently leaked, show a heavy dependence on crypto transactions, which now make up a big slice of its income. Incorporated in the British Virgin Islands, with a major operating arm in the UAE, Telegram is clearly betting big on digital assets.

The financial report, audited by PwC in Dubai, reveals that the company booked a modest gain of $500,000 from revaluing digital assets in its profit and loss (PnL) account. However, $86 million gain was recorded under other comprehensive income.

Looking closer at Telegram’s earnings, it’s clear that two new revenue streams are propping up the numbers: the “integrated wallet” and “sale of collectibles.” Together, these account for more than 40% of the company’s revenue.

The integrated wallet, introduced just last year, is a software tool that lets users store, send, receive, and trade crypto assets directly within the app.

As of the end of 2023, the value of Telegram’s crypto assets was nearly $400 million, much higher than the company’s cash reserves.

The company’s accounts also reveal some interesting related-party transactions. Pavel himself purchased $64 million in Telegram’s convertible bonds last year, showing a high level of personal investment in the company.

He also bought $300,000 worth of Telegram Premium subscriptions for giveaways, using Toncoins to make the purchase.

While the company is still 100% owned by Durov, it has also raised over $2.3 billion through convertible bonds from some big players—sovereign wealth funds, hedge funds, and tech-focused investors.

Whether or not that strategy will be enough to counterbalance the significant losses remains to be seen.