Worldcoin, the crypto startup co-founded by Sam Altman of OpenAI, has received approval to resume its iris-scanning operations in Kenya after a year-long investigation into privacy concerns. Kenya was one of the launch countries for Worldcoin’s iris-scanning scheme, which aimed to create a new identity and cryptocurrency system. However, the program faced regulatory issues and was suspended shortly after its launch.
The Directorate of Criminal Investigations (DCI) in Kenya has now closed the investigation, stating that no further police action is required. However, the DCI has advised Worldcoin to register the business officially, obtain necessary licenses, and vet its vendors for continued operations.
The investigation and suspension of Worldcoin’s activities in Kenya lasted nearly a year. The suspension was due to concerns regarding the authenticity, legality, security, financial services, and data protection of the startup. A parliamentary committee conducted its own investigation and recommended shutting down the operation entirely, citing violations of Kenyan regulations related to data protection, consumer protection, computer misuse, cybercrimes, and acts of espionage.
The committee also found that Worldcoin and its umbrella companies were not registered businesses in Kenya and that its local partners were not registered as data processors or controllers, despite collecting data on behalf of the crypto project. Additionally, Worldcoin failed to obtain approval from the ICT regulator for the use of telecommunication devices called Orbs in the country.
It remains uncertain what impact the parliamentary committee’s recommendation to shut down Worldcoin’s operations will have in the future. However, Tools for Humanity, the umbrella company behind Worldcoin, expressed gratitude for the fair investigation conducted by the DCI and emphasized its commitment to working with the government of Kenya to resume World ID registration across the country.
While the situation in Kenya seems to be progressing positively for Worldcoin, it is important to note that the company still faces investigations in other countries. In Germany, where only orbs are listed currently, the data protection authority in Bavaria is examining the company, and a decision is expected next month. Spain and Portugal are also conducting separate investigations into Worldcoin’s operations.
The challenges faced by Worldcoin highlight the potential issues associated with new technologies and the lack of preparedness among many jurisdictions. The Kenyan government committee called for the disabling of Worldcoin’s physical and virtual presence until proper regulations for virtual assets are established. However, Kenya has taken steps to develop a regulatory and monitoring framework for virtual asset usage, indicating a recognition of the need for more formal processes in evaluating companies like Worldcoin.
Overall, Worldcoin’s journey in Kenya serves as a reminder of the complexities and challenges faced by crypto startups when introducing new technologies in different jurisdictions. The resolution of the investigation presents an opportunity for Worldcoin to work closely with the government and resume its mission of creating economic opportunities for people in Kenya and beyond.
