Kenya halts Worldcoin operations over safety concerns

CS Kindiki suspends Worldcoin data collection over security concerns

Kenya Interior Minister Kithure Kindiki announced Wednesday that the government had halted the operations of the cryptocurrency project Worldcoin (WLD) in the country to assess public safety risks.

Worldcoin has garnered significant interest in the country since its launch last week. The project, founded by OpenAI CEO Sam Altman, offers global identity through iris scans to obtain a digital ID.

The team has stationed Worldcoin Orbs — the iris scanning device — in supermarkets and malls across Kenya. Over 350,000 Kenyans registered for the iris scans on Tuesday, according to local media. They were drawn to the company’s rewards program of 7,700 Kenyan shillings ($55).

In a statement on Facebook on Wednesday, Kindiki expressed concerns about Worldcoin’s activities involving iris data collection.

“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,” Kindiki said, as quoted by Inside Bitcoins.

“It will be critical that assurances of public safety and the integrity of the financial transactions involving such a large number of citizens be satisfactorily provided upfront.”

Kindiki mentioned that government agencies would investigate how the data collected by Worldcoin would be used. He said the government would take appropriate action against anyone involved in the project.

“Relevant security, financial services and data protection agencies have commenced inquiries and investigations to establish the authenticity and legality of the aforesaid activities,” Kindiki said.

Concerns over reward program

Following a preliminary assessment, the Communications Authority of Kenya and the Office of the Data Protection Commissioner expressed concerns about its operations. Shortly after the project’s launch, they cautioned residents trying to obtain Worldcoin’s “free” tokens.

Among the issues was the practice of obtaining consumer consent in exchange for a monetary reward, which they see as crossing into inducement.

The Cayman Islands-based Worldcoin Foundation said it would use the suspension period to cooperate with authorities. It would also clarify the extent of the privacy measures it has implemented in Kenya and other locations where it operates.

“Worldcoin remains committed to providing an inclusive, privacy-preserving, decentralised on-ramp to the global digital economy and looks forward to resuming its services in Kenya while working closely with local regulators and other stakeholders,” the foundation said in a statement.

The rewards for getting iris scans were worth more than half of Kenya’s monthly minimum wage of approximately $106. Before the suspension, the crypto reward tokens could be converted into local currency through crypto exchanges like Binance.

Subsequently, companies started offering services to convert crypto rewards into cash. Nuzo, for instance, provided discounts on food items to those who used their service at a convention center to exchange WLD tokens.

Despite the suspension in Kenya, WLD’s value surged by 3.5 percent in the last 24 hours, trading at $2.42 at 9:20 EST. Its market capitalization increased by 4.59 percent to $278.1 million, with trading volume jumping by nine percent to $114.8 million.

Facing criticism worldwide

Worldcoin has faced criticism from many government agencies worldwide. Countries like Britain, Germany and France have expressed concerns about the project.

France’s privacy regulator has questioned the legality of collecting biometric data. Likewise, British authorities are currently conducting their own inquiries into the project. Meanwhile, Germany’s Bavarian State Office of Data Protection Supervision has been investigating the project since November 2022, per a Reuters report.