Telegram, one of the most popular social connectivity platforms, has temporarily blocked its wallet services for UK citizens. This move comes from its intent to align with the crypto-based regulatory laws of the United Kingdom.
The platform that wishes to provide crypto services in the UK must register with the FCA (Financial Conduct Authority) to obtain its license, formally called the “AML/CTF Cryptoasset Registration”. As the financial services industry regulator of the UK, the FCA has its own set of rules to approve the license.
To comply with the rules of FCA, Telegram has decided to pause the wallet services temporarily for UK users. Until the process is successfully done, all UK customers will be allowed to withdraw their assets to external wallets with zero gas fees.
What is FCA’s AML/CTF Cryptoasset Registration? Why is it Important?
All the crypto businesses in the UK are required to register for an FCA license. To be eligible for it, FCA will check that you have adequate documents and policies that align with the regulations. Based on the regulatory laws of 2017, the main aim of the license is to reduce the risk of money laundering and terrorist financing.
As a platform that is renowned for not regulating the fraudulent activities of its users, Telegram now has to step into strict rules and activities to prevent illicit user profiles, channels, bots, and mini-apps.
Why Telegram Wallets Are Suspended?
The “Wallet in Telegram” uses mini-apps to communicate with the users. It is mostly utilized by web3 tap2earn players to receive their mining rewards. Recent heavy usage of these wallets was from the Hamster Kombat game when billions of coins had airdropped to millions of its users.
Recently, the UK’s regulations have become strict, and in an attempt to go with it, crypto business providers are making significant changes in their services. As a part of this Wallet in Telgram is also planning major changes, restructuring their interface for customers in the UK.
The temporary suspension may help the platform to pass the rules and regulations smoothly, and once it has been granted its license, the services will be restarted. The exact dates of these procedures have yet to be announced officially. Experts opine that it may take long to get a license, especially for a wallet provider based on Telegram.
Telegram as a Bridge from the Illegal to the Legal: Changing Policies and Features
Telegram is infamous for its illegal activities. The founder Pavel Durov ignored these networks by not imposing strict actions against them. As a result, Durov was arrested recently by the French regulators. This led to a need for changes in the Telegram policies. The FCA license can be seen as a part of this broader evolution of the platform.
Telegram has been used by scammers and illegal businesses through its nuanced features like bots, mini-apps, and Telegraph. The Spread of illicit materials through Telgraph blogs was a headache to the Western regulators. Various mini-apps looted the time and money of inexperienced novice web3 users.
All these issues, combined with the pressure of regulators, compelled the app to take strict actions. Durov tweeted in September 2024,
“Telegram Search is meant for finding friends and discovering news, not for promoting illegal goods. We won’t let bad actors jeopardize the integrity of our platform for almost a billion users”, and took out the “Businesses Nearby” feature as the primary measure.
What’s Next for Telegram & its Users?
- Crypto Withdrawal: A major issue that UK users will face is the disconnection from the TON-based web3 games, airdrops, and other activities. However, users can send their assets to an external wallet without any fees, to secure their crypto.
- Future Updates: As it is a temporary move, with the adoption of all the regulations, we expect the services to resume on November first week, and everything will be normal as usual.
Concluding Thoughts on Telegram
This temporary issue with the wallet will be solved soon after the arrival of the FCA license, and we can expect strict laws and regulations while using the updated Telegram wallets. However, with this large user base and fraudulent entities, it is our own responsibility to stay safe by verifying all the apps and accounts we are engaging with.
At the moment, do your own research while navigating through Telegram-based crypto apps, and avoid sharing personal information with anybody. With the eradication of fraudulent Telegram networks, we can expect another spring with legitimate service providers.
