Worldcoin Regulatory Scrutiny Grows As Argentina Launches Investigation Over Data Privacy

Worldcoin (WLD), the iris-biometric cryptocurrency project, is currently under investigation by Argentinian authorities, just days after its warehouse in Nairobi was raided by authorities.

The Argentine Agency for Access to Public Information (AAIP) commenced its investigation into Worldcoin over the legality of its data collection.

"The investigation will carefully analyze the processes and practices in relation to the collection, storage and use of personal data, to identify possible effects on the rights recognized by Law 25,326. In addition, appropriate steps will be taken to address any identified issues and ensure that the company complies with security and privacy standards," the agency said in its notice, roughly translated by Google Translate.

"The case reached public notoriety in recent weeks due to the procedure of scanning the face and iris of numerous people in exchange for economic compensation in different parts of the Autonomous City of Buenos Aires and the provinces of Buenos Aires, Córdoba, Mendoza and Black river," the agency added.

The AAIP recommended that Worldcoin should register with the agency, and disclose its data processing policy, including the purpose of sensitive data collection and the period for storing data.

"Following the provisions of the Personal Data Protection Law, it is the obligation of those responsible for data processing to have their databases registered with the AAIP, provide information about their treatment policy, indicate what they require sensitive data for and what is the processing time. conservation of the same, as well as detailing the security and confidentiality measures that are applied to safeguard personal information," the AAIP said.

Unfortunately, the agency did not reveal if Worldcoin complies with its regulations.

"Worldcoin was designed to protect individual privacy and has built a robust privacy program. The project complies with all laws and regulations governing the processing of personal data in the markets where Worldcoin is available, including but not limited to Argentina's Personal Data Protection Act 25.326 (Ley de Protección de los Datos Personales)," the Worldcoin Foundation said in an email sent to International Business Times.

"The project will continue to cooperate with governing and regulatory bodies on requests for more information about its privacy and data protection practices. Worldcoin remains committed to working with our partners globally to ensure that the Worldcoin project meets regulatory requirements and provides a safe, secure, and transparent service for verified humans," the company further added.

The development comes after Kenyan authorities last week raided the company's warehouse in Nairobi and seized its machines and documents.

The supposed raid was executed after authorities conducted an investigation and discovered that Worldcoin failed to disclose its true intentions when it registered in Kenya, said Immaculate Kassait, the country's Office of the Data Protection Commissioner.

The raid came on the heels of the announcement from Kenya's Ministry of the Interior that it has suspended Worldcoin's operations over concerns about the company's ongoing "registration of citizens through the collection of eyeball/iris data."

"I think it is important to have multiple independent assessments of the technology and collection mechanisms not only to understand what can be gathered now, but also what information could be potentially derived from this in the future. On paper, the really interesting part of Worldcoin's concept is that the iris scan is discarded after reading, avoiding the storage of that highly sensitive data," Sacha Ghebali, the Tie Terminal Director of Strategy, told International Business Times when asked about the scrutiny Worldcoin is receiving from various regulators all over the world.

The Tie Terminal is a digital asset information platform for institutions.

"The concept of a sort of hegemonic ID, and cryptocurrency, that transcends borders is certainly a very interesting experiment with significant first-mover advantage. The pseudonymity of the internet, neither allowing for human robust authentication nor allowing for strong privacy, has been a great challenge that Worldcoin attempts to tackle with a Blue Ocean strategy. Whilst it is an experiment, it is aiming to be at the cornerstone of everyday life interactions for almost every person on earth," the executive added

Ghebali, who used to be the data and analytics lead at Kaiko, also discussed the possibility of iris-scanning technology being widely adopted in the crypto industry.

"Nobody can predict if this will be widely adopted or if it will offer sticky and valuable use cases. The launch has been one of the strongest crypto launches in recent years, but just like with all crypto and NFT projects, the challenge will be to keep all those users active and engaged. When it comes to government use, I think it would obviously necessitate deep policy and privacy analysis on how to move forward. It is not unprecedented for private companies, like the giant Safran, to handle authentication and identity systems for governments, and it may pave the way for more innovation or replication of the tech in different contexts," he told IBT.

"Beyond potential security breaches, many have raised dystopian use cases of the technology like tracking and surveillance," Ghebali said before explaining the advantages Worldcoin can offer.

"The biggest promise of Worldcoin is to provide a system that allows for easy and effective human identification system without disclosing personal information like a phone number or email address. It also aims to disrupt remittances and seemingly to make it easier for people across the planet to be able to develop both social and financial relationships," the executive further said.

As of 5:05 a.m. ET on Friday, WLD, the cryptocurrency of Worldcoin, was trading down at $1.70, with a 24-hour trading volume up by 51.01% at $104,496,716, representing a 6.14% decrease in the last 24 hours and a 24.95% loss over the past seven days.

Based on the latest data from CoinMarketCap, WLD's total circulating supply stands at 124,197,391 WLD, with its value down by 5.51% at a $211,148,106 market cap.

(Update on August 12:This story was edited to include the official statement from Worldcoin related to the investigation by the Argentine Agency for Access to Public Information (AAIP) over the legality of its data collection.)