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Encrypted doesn't necessarily mean e2ee.

It doesn't do E2EE by default, you need to select it when messaging someone.

Nope. It's because of the large telegram group chats for the most part and those aren't E2EE. The only chats that can be E2EE on telegram are one to one DMs and that's only if you manually enable it.

i.e. They refused to turn over chat records that they have server side access to.

It's worth noting that they could do E2EE here for group chats but they don't. Signal does it but telegram wholesale refused to.