Telegram’s Wallet, a third-party cryptocurrency wallet mini app on the Telegram messenger, is undergoing significant transformations. It is implementing stricter Know Your Customer (KYC) rules and changing its service provider.
On May 29, users of Telegram’s Wallet were informed about various updates to its KYC system, which now requires additional personal information for certain transactions. According to an update seen by Cointelegraph, Wallet users will need to disclose their name, phone number, and date of birth to access all of the wallet’s default features, except for withdrawals. The announcement from Wallet states that starting June 3, updated account details will be required for all features except withdrawals.
Wallet’s new KYC system brings about substantial changes to the user experience on Telegram’s Wallet. Prior to the update, users did not need to complete any KYC process to use the Wallet by default.
The new KYC system of Wallet consists of three tiers. To obtain the “basic” identification level, users must provide some information, 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. However, the “extended” version requires users to provide their national identification to unlock transactions up to 100,000 euros ($108,000) daily and 1 million euros ($1.08 million) monthly. For users who require an even higher limit, they must provide their residential address to unlock the “advanced” version, which removes the upper limit on the amount of funds that can be transferred.
The new rules also impose significant limits on card purchases and peer-to-peer purchases. However, these changes do not apply to TON Space, Wallet’s self-custody sub-wallet, which allows users to perform decentralized swaps and transfer nonfungible tokens.
In addition to the KYC updates, Telegram’s Wallet has announced that its services will now be provided by a different company. Starting from May 30, 2024, Wallet services will be offered by WOT Global Solution, a subsidiary of The Open Platform (TOP), formerly known as First Stage Labs. Wallet merged with TOP in September 2023 to collaborate on Web3 applications and development. As a result, all user data will be transferred to WOT Global Solution, including name, address, phone number, transaction data, and any other data that Wallet may have on its users. The spokesperson for Wallet assured that this data will be securely stored and will only be used for Wallet’s operations.
To avoid data transfer to WOT Global, users were required to delete their Wallet accounts by May 20. The company stated that this change is part of its ongoing efforts to provide better quality services.
Telegram’s Wallet is a third-party Telegram mini-app that enables users to purchase cryptocurrencies like Bitcoin (BTC), Tether (USDT), and Toncoin (TON), a coin originally supported by Telegram.
Unlike self-custodial crypto wallets such as MetaMask, Trezor, or Ledger, which allow users to have direct ownership and control over their assets without any limits or KYC, Telegram’s Wallet operates as a custodial wallet. This means that users do not directly own their assets but instead entrust their crypto holdings to a third party. Wallet’s chief operating officer, Halil Mirakhmed, stated in November 2023 that the company chose to make Wallet a custodial solution to simplify the onboarding process for new users.
Cointelegraph reached out to Telegram’s Wallet for comment on the changes but did not receive a response at the time of publication.