Worldcoin — the crypto “proof of identity” startup co-founded by OpenAI’s Sam Altman — has been given the green light to resume iris scanning and other operations in Kenya after a year-long government investigation over privacy concerns was dropped.
Kenya was one of the countries that launched Worldcoin for its iris scanning program – which the startup was building as the basis of a new identity system and cryptocurrency – but its operations in the country have been halted for nearly a year after the program was scrapped by regulatory authorities just days after its launch.
Now the country’s Directorate of Criminal Investigations (DCI) has issued a letter, dated June 14, to the company’s legal team, saying the investigation has been “closed without further police action”.
However, it also called on the crypto startup to officially register the business, obtain the required licenses and audit its suppliers “for prudent continued operation.”
The letter caps nearly a year of suspension and investigation of Worldcoin’s activities. Kenya suspended registration of Worldcoin shortly after the cryptocurrency was launched in July last year due to concerns about the “authenticity and legality” of its security, financial services and data protection.
Separately, a parliamentary committee, formed after that suspension, recommended a complete shutdown of the business after conducting its own investigation and discovering a series of violations.
Specifically, it found that Worldcoin and its umbrella company Tools for Humanity had breached Kenya’s regulations on data protection, consumer protection and the Computer Misuse and Cybercrime Act. It also concluded that her activities “constituted acts of espionage and a threat to the state.”
It also stated that Worldcoin, Tools for Humanity Corp (USA) and Tools for Humanity GmbH (Germany) were not registered businesses in Kenya and that its local partners were not registered as data controllers or controllers despite collecting data for crypto project account . It also said Worldcoin had also failed to get approval from the ICT regulator for local use of its bulb scanning hardware (also known as ‘Orbs’), which it said are telecommunications devices.
It is not yet clear what impact, if any, the parliamentary committee’s recommendation on the shutdown will have next.
“We are grateful for the DCI’s fair investigation and the Director of Public Prosecutions’ determination to close the matter,” said Thomas Scott, Chief Legal Officer, Tools for Humanity. “This welcome result, however, is not an end but a beginning. We will continue to work with the Kenyan government and others and hope to resume Global ID registration across the country soon. For today, we are pleased to return to our focus on advancing Worldcoin’s mission: creating opportunities for people in Kenya and elsewhere to participate in the global economy.”
It is also important to note that Worldcoin and Tools for Humanity are still facing a number of other pending investigations in other countries.
In Europe, the only country where “Orbs” are currently listed as available is Germany. This could change, however: the data protection authority (DPA) in Bavaria is currently looking into complaints about Worldcoin, and we understand that a decision could be issued next month, in July. Bavaria has led to other GDPR investigations because Tools for Humanity has an entity there. In Spain, where Worldcoin suspended operations earlier this year following a DPA order, it has agreed not to restart pending the outcome of the Bavarian DPA’s investigation.
Meanwhile, Portugal’s DPA has turned its attention to the company’s US entity and is separately investigating the allegations. Meanwhile, it has banned Worldcoin from functioning.
Separately, back in AprilItaly’s DPA issued a warning to the company to refrain from any launch or risk sanctions.
In some ways, the whole situation with Worldcoin highlights potential problems with the technology, but it also highlights how ill-prepared many jurisdictions are to deal with new technologies being introduced at a rapid pace.
While the government panel called on Kenya to disable Worldcoin’s physical and virtual presence “including blacklisting the IP addresses of relevant websites” until the country enacts proper regulations on virtual assets, in April the country’s government appeared also start taking steps to establish more formal procedures for evaluating companies like this; forming a multi-service technique group to develop a regulatory and monitoring framework for the use of virtual assets, which would cover crypto startups like Worldcoin.
