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Founder and CEO of Telegram messaging service arrested in France
(www.tf1info.fr)
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The standard I recall being established back in the nineties as to whether strong encryption was even legal in the US was "substantial non-infringing use" or similar. It's been awhile.
The problem with key-escrow or anything similar is that any proscribed circumvention is also available to the "bad guys".
I think Telegram's stance would be that they can't moderate because of strong end-to-end encryption. Back in the day the parallel would have been made to the phone system or mail.
Of course this is all happening in France, so I have no idea what the combination of French and EU laws will have on this, but I would still broadly expect that if a parallel can be made to mail or phone, Telegram would be in the clear. The phone company and mail service have no expectation of content moderation.
I guess we'll see.
The huge difference between mail or phone and telegram is that both mail and phone work with law enforcement, with useful records being made available upon subpoena. Telegram, by design, will not.
If you think drawing that parallel is useful to Telegram, they would then also be required to maintain the same standards of security as the mail, with package inspections, drug dogs, entire teams of government officials investigating illegal activities etc.
The criminals use it precisely because it is not a parallel to other available channels, as it circumvents those safeguards.