Telegram Wallet Enforces New KYC Rules, Switches Providers

A third-party cryptocurrency wallet bot on Telegram Messenger is making major changes to Telegram Messenger, such as installing Know Your Customer (KYC) rules and changing service providers.

On May 29, Telegram Wallet informed users about several updates to its KYC system, which requires more personal information to carry out certain transactions.

According to an update spotted by Cointelegraph, Wallet users must provide their name, phone number, and date of birth to use all of the wallet's default features except withdrawal.

“Starting June 3, all features except withdrawal will require updated account details,” notes the Wallet announcement.

Wallet's new KYC system introduces major changes to the user experience on Telegram Wallet. Before the update, users did not need to complete KYC to use Telegram Wallet by default.

Wallet's new KYC system has three steps

Under the change, users must transfer at least some information to get the “basic” level of identification, which limits incoming crypto transactions to 3,500 euros ($3,780) per day and 35,000 euros ($37,800) per month. This level of identification does not require any documentation.

“These limits are approximate and depend on local exchange rates,” says the Wallet KYC notice, adding that the limits may vary across countries.

The next step, the “extended” version, requires the user's national ID to open transactions of up to 100,000 euros ($108,000) daily and 1 million euros ($1.08 million) monthly.

Users who want a higher limit must provide their home address to unlock the “advanced” version, which removes the upper limit on the amount of money that can be transferred.

High restrictions have also been placed on card purchases and peer-to-peer purchases. The changes do not apply to the Toon Space, Wallet's self-sustaining sub-wallet, which allows users to make decentralized swaps and transfer imperishable tokens.

Telegram wallet is now provided by another company

In addition to the wallet announcement, Telegram has also announced that it will offer its pocket service through a separate company. Starting May 30, 2024, Wallet Services will be provided by WOT Global Solution.

Following the change, all user data will be transferred to WOT Global Solution. The information collected includes name, address, phone number, transaction data and any other data Wallet may have on its users, the announcement notes.

Users had until May 20 to delete their Wallet account to prevent data transfer to WOT Global.

“This change is part of our ongoing efforts to provide you with better quality service,” the company said.

Related: Coinbase issues crypto transfers via WhatsApp, Telegram links

Telegram Wallet is powered by a third-party Telegram bot that allows users to buy cryptocurrencies such as Bitcoin (BTC), Ether (ETH) and Toncoin (TON), a coin originally created by Telegram.

Why can Telegram wallet limit crypto transactions?

By design, Telegram Wallet acts as a escrow wallet, meaning that its users do not own their assets directly but entrust their cryptocurrencies to a third party to hold them.

In contrast, self-custodial wallets such as MetaMask, Trezor or Ledger allow users to hold their crypto directly without restrictions or KYC.

Wallet Chief Operating Officer Halil Mirakmed told Cointelegraph in November 2023 that the company chose to make Wallet a security solution to ease the onboarding of new users.

Cointelegraph reached out to Telegram Wallet for comment on the changes, but did not receive a response as of press time.

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