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Telegram Wallet is implementing stricter KYC rules and switching service providers to WOT Global Solution, significantly impacting user transactions starting June 3.
Telegram's Wallet Tightens KYC Regulations and Updates Service Providers
Wallet, a third-party cryptocurrency wallet application for the Telegram messenger, is implementing significant changes. According to Cointelegraph, these changes include adopting more stringent Know Your Customer (KYC) regulations and switching service providers.
The Telegram Wallet notified users on May 29 regarding various revisions to its Know Your Customer (KYC) system, which would necessitate supplementary personal data for specific transactions.
According to an update seen by Cointelegraph, except for withdrawals, Wallet users must provide their name, phone number, and date of birth to access all default features.
"Starting June 3, all features except withdrawals will require updated account details," Wallet's announcement notes.
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.
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 approximate and depend on local exchange rates," Wallet's KYC notice says, adding that the limits may vary in different 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 effectively eliminates 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.
Telegram Wallet Transfers Services to WOT Global Solution for Enhanced User Experience
In conjunction with the notification above, Telegram's Wallet also declared that an alternative organization would be entrusted with providing its services. As of May 30, 2024, wallet services will be rendered by WOT Global Solution.
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 change is part of our ongoing efforts to provide better quality services to you," the firm noted.
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.
Telegram's Wallet Opts for Custodial Model to Simplify User Integration
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, Wallet's chief operating officer, told Cointelegraph in November 2023 that the company favored transforming Wallet into a custodial solution to simplify the integration process for 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.
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