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Worldcoin Suspended by Kenya on Financial Security and Privacy Concerns
Kenya is the first country to fully suspend Worldcoin operations. Data protection offices in Europe have started investigations.
Kenya's Ministry of the Interior suspended the operations of Worldcoin, the identity crypto protocol co-founded by OpenAI's Sam Altman, as the country's financial, security and data protection services investigate the legitimacy and data protection of the project, according to a statement posted on the ministry's Facebook page on Wednesday.
"The Government is concerned by the ongoing activities of an organization calling itself 'WORLD COIN' which is involved in the registration of citizens through the collection of eyeball/iris data," said the statement signed by Minister Kithure Kindiki.
STORY CONTINUES BELOW
Worldcoin is attempting to create a global identification mechanism based on iris scans, which can be used to prove that an agent is human and unique. In a world where artificially intelligent agents are participating in the economy, this could be crucial, the project says. But the collection of biometric data and the signup process in developing countries have drawn criticism, including accusations of exploitation.
Several European regulators have started investigations into Worldcoin, among them the Bavarian data protection office that supervises the firm, according to a statement sent to CoinDesk. Kenya, however, is the first country to go further and suspend the company's operations completely while local agencies investigate.
Users that have had their irises scanned have received WLD tokens since the project's launch last week. The token has risen 4.8% to $2.41 on crypto exchanges in the past 24 hours, according to CoinMarketCap data.
Kenya's Capital Markets Authority also issued a "cautionary statement" on Wednesday. Neither the project nor the tokens are regulated by the authority, it said in an email sent to CoinDesk. The statement warned of "potential fraudulent schemes that may emerge in the over-the-counter market of crypto tokens." The CMA is willing to work with the company through its regulatory sandbox.
Worldcoin had not responded to CoinDesk's request for comment by the time of publication.
UPDATE (Aug. 2, 07:52 UTC): Adds token performance in fourth paragraph.
UPDATE (Aug. 2, 13:03 UTC): Adds statement from Capital Markets Authority.
Eliza Gkritsi
Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI, having previously covered mining for two years. She previously worked at TechNode in Shanghai and has graduated from the London School of Economics, Fudan University, and the University of York. She owns 25 WLD. She tweets as @egreechee.
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