Wallet, a third-party cryptocurrency wallet bot on Telegram messenger, is undergoing significant changes, such as imposing stricter Know Your Customer (KYC) rules and changing its service provider.
On May 29, Telegram's Wallet informed users about several updates to its KYC system, requiring additional personal information to conduct certain transactions.
According to an update seen by Cointelegraph, Wallet users will have to disclose their name, phone number and date of birth to use all of the wallet's default features, except for withdrawals.
“Starting June 3, all features except withdrawals will require updated account details,” Wallet’s announcement notes.
Wallet’s new KYC system introduces massive changes to the user experience on Telegram’s Wallet. Before the update, users did not need to complete any KYC to use Telegram’s Wallet by default.
Three tiers of Wallet's new KYC system
With the change, users will have to pass at least some information to get the “basic” identification level, 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,” Wallet’s KYC notice says, adding that the limits may vary in different countries.
The next tier, the “extended” version, asks for a user’s national identification to unlock transactions up to 100,000 euros ($108,000) daily and 1 million euros ($1.08 million) monthly.
Users who want a higher limit need to provide their residential address to unlock the “advanced” version, which will remove an upper limit on the sum of funds that can be transferred.
Significant limits are also imposed on card purchases and peer-to-peer purchases. The changes do not apply to TON Space, Wallet’s self-custody sub-wallet, which allows users to perform decentralized swaps and transfer nonfungible tokens.
Telegram's Wallet is now serviced by another company
In addition to the Wallet’s notice, Telegram’s Wallet also announced that its services will be provided by a different company. Starting from May 30, 2024, Wallet services will be provided by WOT Global Solution.
All user data will be transferred to WOT Global Solution following the change. Collected data includes name, address, phone number, transaction data and any other data that Wallet may have on its users, the announcement notes.
In order to prevent data transfer to WOT Global, users should have deleted their Wallet accounts by May 20.
“This change is part of our ongoing efforts to provide better quality services to you,” the firm noted.
Related: Coinbase rolls out crypto transfers via links sent on WhatsApp, Telegram
Telegram’s Wallet is operated by a third-party Telegram bot, which allows users to buy cryptocurrencies like Bitcoin (BTC), Ether (ETH) and Toncoin (TON), a coin initially created by Telegram.
Why Telegram's Wallet is able to limit crypto transactions
By design, Telegram’s Wallet operates as a custodial wallet, meaning its users do not own their assets directly but rather entrust holding their crypto to a third party.
In contrast, self-custodial crypto wallets like MetaMask, Trezor or Ledger allow users to hold their crypto directly without any limits or KYC.
Wallet chief operating officer Halil Mirakhmed told Cointelegraph in November 2023 that the firm preferred to make Wallet a custodial solution to ease the onboarding of new users.
Cointelegraph approached Telegram’s Wallet for a comment regarding the changes but did not receive a response by the time of publication.
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