The free instant messaging app, which lets people exchange messages, photos and videos in groups of up to 5,000 people, has attracted about 100 million users since its launch in 2013.
The FSB sent a letter to Telegram in July demanding “information necessary to decode users’ sent, received, delivered and processed electronic messages”.
Something Durov responded to (via his VK acount) saying the government demands are “technically impossible to carry out” and violate Russian constitutional rights on privacy.
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The fine is the latest move in a dispute between Telegram and the Russian authorities as Moscow pushes to increase surveillance of internet activities.
Telegram now has 10 days to appeal Monday’s decision. If an appeal fails, the company will be given a grace period to hand over its encryption keys after which it could be blocked in Russia.