Telegram Wallet implements new KYC rules and switches providers
Wallet, a third-party cryptocurrency wallet bot on Telegram Messenger, is undergoing major changes, including imposing stricter Know Your Customer (KYC) rules and changing service providers.
On May 29, Telegram Wallet notified users about several updates to its KYC system that would require additional personal information to perform certain transactions.
According to an update seen by Cointelegraph, wallet users will be required to disclose their name, phone number, and date of birth to use all of the wallet’s basic features except withdrawals.
“Starting June 3, updated account details will be required to use all features except withdrawals,” Wallet said.
Wallet’s new KYC system brings a huge change to the user experience of Telegram Wallet. Before the update, users did not need to complete KYC to use Telegram Wallet by default.
3 steps of Wallet’s new KYC system
Once the changes take effect, users will be required to pass on at least some information to obtain a “basic” level of identification, which will limit incoming cryptocurrency transactions to 3,500 euros ($3,780) per day and 35,000 euros ($37,800) per month. This level of identification does not require documentation.
“These limits are approximate and will vary based on local exchange rates,” the wallet’s KYC notice reads, adding that limits may vary by country.
The next level, the “extended” version, will require users’ country identification to unlock transactions of up to 100,000 euros ($108,000) per day and up to 1 million euros ($1.08 million) per month.
Users who want higher limits will need to provide a residential address to unlock the “advanced” version, which removes the cap on the total amount of funds that can be transferred.
Significant restrictions also apply to card purchases and P2P purchases. These changes do not apply to TON Space, the wallet’s self-custodial sub-wallet that allows users to perform decentralized swaps and transfer non-fungible tokens.
Telegram Wallet is now serviced by another company
In addition to the wallet announcement, it was revealed that Telegram Wallet will also be provided by another company. Starting May 30, 2024, WOT Global Solutions will provide wallet services.
After changes, all user data will be transferred to WOT Global Solutions. Data collected includes name, address, phone number, transaction data and other data Wallet may have about you, notices.
To prevent data transfer to WOT Global, users must delete their wallet account by May 20.
“These changes are part of our ongoing effort to provide you with better quality service,” the company said.
Related: Coinbase launches cryptocurrency transfers via links sent on WhatsApp and Telegram.
Telegram’s Wallet is powered by a third-party Telegram bot that allows users to buy cryptocurrencies such as Bitcoin (BTC), Ether (ETH), and Toncoin (TON), the coin first created on Telegram.
Why Telegram Wallet May Restrict Cryptocurrency Transactions
By design, Telegram’s wallet operates as a managed wallet. This means that users do not own their assets directly, but entrust their cryptocurrency holdings to a third party.
In contrast, self-managed cryptocurrency wallets like MetaMask, Trezor, or Ledger allow users to hold their cryptocurrencies directly without restrictions or KYC.
Halil Mirakhmed, Wallet’s chief operating officer, said in a November 2023 interview with Cointelegraph that the company prefers to make Wallet a managed solution to ease the onboarding of new users.
Cointelegraph approached Telegram Wallet for comment on the changes, but did not receive a response by the time of publication.
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