The new altcoin project launched by OpenAI CEO Sam Altman has caught the eye of regulators. Recently, 4 different governments have launched an investigation into the project.
Sam Altman’s altcoin project hits regulator wall
Worldcoin (WLD), the next-generation altcoin project supported by the CEO of OpenAI and launched last week, has come under fire over data breach concerns. Last week, the first investigation came from British authorities.
After others, Worldcoin is currently under review by Germany’s data protection supervisory authority. According to Reuters, the Bavarian State Data Protection Supervision Agency has begun investigating the German subsidiary of the controversial project. Worldcoin started scanning people’s eyes last week to verify their ‘World Identity’.
Since Worldcoin launched, proof of personhood demand has surged. On average, a unique human is now verifying their World ID every 7.6 seconds & new records are being set daily.
Thank you for your patience with the project as more work is done to better meet worldwide demand. pic.twitter.com/gPmr0oQWCR
— Worldcoin (@worldcoin) July 28, 2023
According to the report, this investigation began in November 2022. The German authorities’ review concerns the extensive processing of sensitive biometric data. Germany’s data protection authorities are examining in detail whether the Worldcoin project has taken appropriate measures regarding data use and privacy. The outcome of this review could have significant implications for the project’s activities and data processing in Germany.
Experts continue discussions on Worldcoin
Worldcoin scans the iris of users to provide a digital identity and cryptocurrency. According to its website, the project has so far amassed 2.1 million records worldwide.
Michael Will, head of the Bavarian State Data Protection Control Agency, expressed his concern at the large-scale processing of sensitive data. Will told Reuters that such transactions can pose significant risks, especially when it comes to highly sensitive biometric data.
Worldcoin is scaling to 1.5K available Orbs this summer & fall in more than 35 cities around the world.https://t.co/ZTqdjpF87x
— Worldcoin (@worldcoin) July 24, 2023
“These technologies do not appear at first glance to be how robust or well-analyzed they are for the primary purpose of transacting in the financial information transfer space,” Will says.
On the contrary, Worldcoin’s website claims to protect privacy and encrypt personal data. While the Cayman Islands register the global initiative, EU data protection rules govern its European presence.
Establishes a rigid framework for data users in the EU
Recently, Binance had to stop supporting privacy coins after adopting the MiCA rule. The “travel rule” imposed by MiCA puts companies at risk if they facilitate the use of such cryptos in EU legislation. Exchanges that allow buy/sell transactions despite the ban face harsh penalties.
Therefore, authorities are currently investigating the consequences of collecting such a large amount of biometric data.
Currently, 4 countries are investigating the altcoin project.
The controversy surrounding Worldcoin is not limited to Germany. Both French and British data regulators have expressed concerns about the project’s data collection practices. France’s privacy watchdog, CNIL, stated that the legality of Worldcoin’s data collection “seems questionable”.
WLD, which debuted last week, is currently trading in the $2.3 region. After a strong start, it lost a serious 70% of its value. As we quoted as Kriptokoin.com, some analysts say that the price may remain stable for months.
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