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Cryptocurrency News Articles

Worldcoin Reboot: Sam Altman’s Crypto-Powered, Online Identity Venture Is Growing Faster Than Ever — Just Not in Europe

Dec 18, 2024 at 11:05 pm

The shift from Europe to the developing world underscores Worldcoin's recent reboot.

Worldcoin Reboot: Sam Altman’s Crypto-Powered, Online Identity Venture Is Growing Faster Than Ever — Just Not in Europe

Worldcoin, an initiative spearheaded by Sam Altman, is encountering obstacles in Europe due to stringent data privacy regulations. While the venture boasts rapid growth and a presence in Latin America, its operations remain stalled in several regions.

Worldcoin’s mission is to establish a decentralized online identity system, aiming to provide users with a cryptographically verifiable proof of their humanity. This endeavor entails collecting unique biometric data, specifically iris scans, to generate World IDs.

However, the venture’s aggressive approach to growth has landed it in hot water with regulatory bodies. Despite handling sensitive biometric information, Worldcoin did not seek prior approval from health officials or data privacy agencies before commencing its global rollout in July 2023.

Fatemeh Fannizadeh, general counsel for the Anoma Foundation, highlights the concerning tactics employed by the venture.

“The early days of Worldcoin iris scanning was absolutely not cute,” Fannizadeh told DL News in an interview.

“They went to regions where the need for a small amount of money was high, where people would more easily part with their sensitive biometric data.”

Worldcoin’s entry into various nations, including Singapore, Hong Kong, the UK, Spain, and Portugal, prompted swift reactions from authorities. In Portugal, the data regulator, the CNPD, sanctioned World for collecting data from minors.

“The report from CNPD is the first time we are hearing from them regarding many of these matters, including reports of underage sign-ups in Portugal,” Jannick Preiwisch, the Worldcoin Foundation’s data protection officer, told DL News in an email.

Despite the venture’s crypto ethos, which typically champions privacy, Worldcoin is being investigated for potentially violating one of the world’s most stringent data privacy regimes — the EU’s General Data Protection Regulation (GDPR).

In Germany, the Bavarian State Office for Data Protection (BayLDA) has been investigating World for more than two years, examining whether the venture infringed on consumers’ rights to data privacy.

Michael Will, the agency’s president, told DL News in an interview that World could be prohibited from operating in the 27-nation bloc until it becomes compliant.

Being locked out of a potential user base of 448 million would certainly deal a blow to World’s aspirations of onboarding a total of 1 billion users.

A World spokesperson told DL News that the firm complies with GDPR and remains committed to compliance with applicable laws.

Co-founded in 2019 by OpenAI’s Altman, Alex Blania, a German entrepreneur, and Max Novendstern, Worldcoin has attracted a hefty $250 million in investment capital from Andreessen Horowitz and Coinbase Ventures, among other backers.

The venture’s business gamble is bold: to provide billions of online users with an irrefutable way to prove they are human and not bots or artificial intelligence (AI) programs.

In theory, this distinction will become invaluable as the internet is increasingly populated by AI programs that can convincingly impersonate human beings.

If it all sounds like the plot of a “Black Mirror” episode, the orbs only solidify the idea. Even Altman himself says the spheres have “a clear ick factor.”

World uses basketball-sized, silver and white orbs to scan irises and convert the data into a string of letters and numbers called an iris code.

This code generates a World ID, a digital passport that World hopes will become as ubiquitous as Google’s sign-in feature. Users also get World’s native WLD cryptocurrency.

But the novelty of World’s business model has clashed with the reality of consumer health and privacy protections. World no longer operates in the UK, Brazil, Hong Kong, and Kenya, among other nations.

“It’s often a conscious decision to rapidly expand despite regulatory uncertainty or to operate in a grey area and deal with it later,” Reuben Yap, co-founder of privacy protocol Firo and former partner at Malaysian law firm Reddi & Co Advocates, told DL News in an interview.

“Crypto is not alone in pursuing this; companies like Airbnb and Uber also took similar risks. They wouldn’t have grown to their size if they checked with regulators first.”

It’s in Bavaria, of all places, where the company is facing its sternest test. Even as its probe continues, the BayLDA has directed World to check user IDs to ensure it isn’t scanning minors.

A spokesperson for the BayLDA told DL News in December that it can’t provide any additional updates.

In the past year, World has been roiled by other controversies.

In September, a DL News investigation reported that criminal groups paid cash to homeless individuals, refugees, and drug addicts to have their eyes scanned at kiosks in Berlin and then kick back portions of the crypto they received in exchange.

At least one group may have raked in nearly $700,000 worth of WLD tokens

News source:www.dlnews.com

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Other articles published on Dec 19, 2024