Worldcoin Slapped with $1.2 Million Fine in Argentina for Alleged Consumer Law Violations

Worldcoin (WLD) faces potential legal penalties in Argentina after the Buenos Aires provincial government filed charges alleging consumer law violations. The company is accused of using unfair "abusive clauses" in its user agreement, including the application of Cayman Island laws and the waiver of collective legal action rights for Argentine users. The charges stem from an audit that raised concerns about the lack of age verification measures and the handling of biometric data collected from users. Worldcoin's native cryptocurrency, WLD, has witnessed a decline in value amidst these legal challenges.

Worldcoin Faces Staggering $1.2 Million Fine in Argentina

Buenos Aires, Argentina - Worldcoin, a cryptocurrency startup co-founded by OpenAI CEO Sam Altman, has been hit with a potential fine of 1 billion Argentine pesos (approximately $1.2 million) in a lawsuit filed by the provincial government of Buenos Aires. The charges stem from allegations of unfair user agreement clauses that violate consumer protection laws in the country.

Alleged Consumer Law Violations

The Buenos Aires provincial government has accused Worldcoin of employing "abusive clauses" in its user agreement. These clauses allegedly give Worldcoin the authority to suspend or terminate its services without providing compensation to affected users. Additionally, the agreement purportedly subjects Argentine residents to the laws of the Cayman Islands and prohibits them from filing collective lawsuits in court.

The provincial government contends that these clauses violate the Civil and Commercial Code of Argentina, which prohibits businesses from imposing unfair terms on consumers. Each violation of the code carries a potential penalty, putting Worldcoin at risk of substantial fines.

Additional Concerns Raised

Beyond the alleged contractual violations, the provincial government has also raised concerns about Worldcoin's practices regarding minors and the storage of biometric data. The audit conducted by the government reportedly revealed that Worldcoin failed to adequately inform users that its services were not intended for individuals under the age of 18, potentially resulting in the iris scanning of minors.

Furthermore, the complaint alleges that Worldcoin stores biometric data collected from Argentine users in an offshore facility in Brazil without providing clear information about data deletion procedures.

Uncooperative Behavior and Potential Fine

The Buenos Aires provincial government claims that Worldcoin failed to provide satisfactory responses during the investigation and that there were contradictions in the company's statements. As a result, the government has filed formal charges against Worldcoin, which could result in the aforementioned fine of $1.2 million.

Market Impact on Worldcoin Cryptocurrency

Amidst these allegations, Worldcoin's native cryptocurrency, WLD, has seen a decline in value. At the time of writing, WLD is trading at $4.86, representing a 4.6% decrease on the 24-hour chart, 30.49% below the seven-day frame, and 45.68% down over the past month. However, WLD remains 191% higher than its price one year ago.

Ongoing Legal Battles

This lawsuit adds to Worldcoin's growing list of legal challenges. The company has previously faced similar accusations in Spain and Portugal. The outcome of these legal proceedings will have a significant impact on Worldcoin's operations and its reputation as a consumer-facing business.

Conclusion

The allegations against Worldcoin in Argentina highlight the growing scrutiny that cryptocurrency companies are facing regarding consumer protection and data handling practices. The potential fine of $1.2 million serves as a warning to other companies in the industry to ensure that their business practices comply with applicable laws and regulations. As the case progresses, the public and investors will closely monitor its outcome to determine the future trajectory of Worldcoin.