Telegram Wallet Enforces New KYC Rules

Users of the default version of the Telegram Wallet were not required to provide any personal information before the new KYC rules.

Wallet, a third-party cryptocurrency wallet application for the Telegram messenger, is implementing significant changes. These changes include adopting more stringent Know Your Customer (KYC) regulations and switching service providers.

The Telegram Wallet notified users on May 29th regarding various revisions to its Know Your Customer (KYC) system, which would necessitate supplementary personal data for specific transactions.

Except for withdrawals, Wallet users must provide their name, phone number, and date of birth to access all default features, according to an update seen by Cointelegraph.

“Except for withdrawals, all features will require updated account information beginning June 3,” Wallet states in its announcement.

The new Know Your Customer (KYC) system for Wallet significantly transforms the user experience of Wallet on Telegram. Before the update, users were automatically permitted to use Telegram’s Wallet without completing any KYC.

A Wallet’s new three-tiered KYC system

Users will be required to provide at least some information to obtain the “basic” identification level, which imposes a daily and monthly limit of 3,500 euros ($3,780) and 35,000 euros ($37,800), respectively, on incoming cryptocurrency transactions. At this level of identification, documentation is optional.

“These limits are approximations and subject to change based on local exchange rates,” advises Wallet’s Know Your Customer notice, adding that they may differ between countries.

The “extended” rank requires an individual’s national identification to authorize transactions with a maximum daily limit of 100,000 euros ($108,000) and a monthly maximum of 1 million euros ($1.08 million).

To access the “advanced” version, users desiring a higher limit must furnish their residential address. This information will eliminate the maximum amount of funds that can be transferred.

In addition, substantial restrictions apply to card and peer-to-peer transactions. TON Space, Wallet’s self-custody sub-wallet, which permits users to conduct decentralized swaps and transmit nonfungible tokens, remains unaffected by the modifications.

A different organization presently manages the Telegram Wallet.

In conjunction with the earlier notification, Telegram’s Wallet also declared that an alternative organization would be entrusted with providing its services. WOT Global Solution will render wallet services as of May 30, 2024.

After the modification, every user record will be transferred to WOT Global Solution. The announcement states that the data collected consists of name, address, phone number, transaction data, and any other information Wallet may possess about its users.

User Wallet accounts should have been terminated by May 20 to prevent data transfer to WOT Global.

“This modification is an ongoing component of our endeavors to deliver services of superior quality to you,” the company stated.

A third-party Telegram bot manages the Wallet on Telegram, enabling users to purchase cryptocurrencies such as Bitcoin (BTC), Ether (ETH), and Toncoin (TON), a coin that Telegram itself initially developed.

The reason Telegram’s Wallet can restrict cryptocurrency transactions

Telegram’s Wallet functions as a custodial wallet by design, which entails users relinquishing direct ownership of their crypto assets to a third party for storage.

Self-custodial cryptocurrency wallets like MetaMask, Trezor, or Ledger enable users to retain their cryptocurrency directly without KYC or limit requirements.

Halil Mirakhmed, chief operating officer of Wallet, stated to Cointelegraph in November 2023 that the company favored transforming Wallet into a custodial solution to simplify integrating new users.

Cointelegraph requested a comment from Telegram’s Wallet concerning the modifications; however, a response still needs to be received as of the publication date.