Worldcoin continues to make negative headlines – Bavaria’s Data Watchdog speaks

In this post:

  • The controversy around Worldcoin continues as Bavaria data watchdog states that it had not wrapped up investigations before WLD launched.
  • Worldcoin remains under heavy investigations by Germany’s Federal Financial Supervisory Authority or BaFin.
  • The Kenyan government suspends Worldcoin operations in the nation as police take extreme measures.
  • Worldcoin has been accused of being a ‘data snitch’ to government entities.

According to incoming market reports, Bavaria’s data watchdog had not completed its privacy and security evaluation of Worldcoin prior to the project’s launch, the agency’s chief stated.  Bavaria is a German state in which Worldcoin (WLD) has established an entity to administer the data for its European users; consequently, the local authority is leading the investigation.

Worldcoin faces intense criticism

Sam Altman, the entrepreneur behind the popular chatbot ChatGPT, co-founded WLD, which aims to promote a new method to verify that an internet user is human and unique using iris scans, artificial intelligence, and zero-knowledge proofs. Verified users can receive Worldcoin token grants. 

On top of this identification protocol, developers can create applications, such as a wallet, where WLD tokens are distributed.

Michael Will, president of Bavaria’s Data Protection Authority, the European agency in charge of overseeing the OpenAI-related project, told reporters on Monday that the agency was still reviewing the project when it went live on July 24, despite the fact that the company is not required by law to notify the authorities and obtain their approval prior to the launch.

At the same time, the financial element of Worldcoin is being investigated. The project is being investigated by Germany’s Federal Financial Supervisory Authority or BaFin. A representative for BaFin told local daily Tagesspiegel that it is unclear whether it requires a permit from the regulator, as other crypto businesses do.

Even before the project’s official launch, it sparked controversy. Criticism has focused on potential privacy concerns, claimed manipulation of people in developing nations, and the fact that a private firm is establishing worldwide identification infrastructure, which is traditionally the responsibility of government institutions.

The investigation data into Worldcoin

The Bavarian DPA’s involvement with Worldcoin began in November 2017, when its French counterpart requested information on whether the project had a Bavarian entity acting as the data controller, the entity that decides how and why data is processed under GDPR and is ultimately liable for the processing. 

Worldcoin responded to the DPA’s request for information in March and also submitted a privacy impact assessment, which is mandated by GDPR for companies that process sensitive data such as biometric information. 

It is noted that based on this information, the Bavarian DPA concluded that the local Worldcoin entity complied with GDPR requirements but had additional concerns.

The Bavarian DPA, as well as French and British authorities, have stated that they are investigating the project. Additionally, Kenyan authorities have suspended Worldcoin operations, citing privacy, security, and financial regulation issues.

Moreover, European data authorities are currently investigating Worldcoin’s data flows, the pseudonymization of personal data, such as biometric iris scans, and the transparency and impartiality surrounding user consent. Worldcoin is anticipated to respond to the authorities’ most recent request for information by September, at which point the investigation may delve deeper into its specific technology.

Worldcoin Nairobi warehouse raided by Kenyan Police

Local news outlets reported on Monday that Kenyan police raided the Nairobi warehouse of Worldcoin on Saturday and confiscated documents and devices.

According to media reports, Immaculate Kassait, commissioner of Kenya’s Office of Data Protection, stated that Tools for Humanity, the parent company of Worldcoin, failed to disclose its actual intentions when registering in Kenya. According to reports, a police team brought Worldcoin data to the headquarters of the Directorate of Criminal Investigations for analysis.

After the project’s July launch, users could receive Worldcoin token airdrops in exchange for being scanned. It is now experiencing troubles in Kenya.

The officers backed by multi-agency officials went to the offices along Mombasa Road armed with a search warrant and broke in Saturday before leaving with machines they believe stores data gathered by the firm.

Local News outlet

The Ministry of the Interior suspended the project’s operations in the country one week ago, despite Kenya’s minister for the digital economy, Eliud Owalo, stating that the ODPC has been in contact with Worldcoin since April and has determined that its activities comply with Kenya’s data-protection laws. 

However, later in the week, the ODPC issued a statement indicating that, following a preliminary review, it had identified “a number of legitimate regulatory concerns” with regard to the proposal. Authorities in the United Kingdom, France, and Germany are also investigating the project.

Many in the crypto community have accused the projects’ confounders of trying to seduce governments with data collection. Reports have it that WLD founders intend to share data with government entities so as to continue operating in countries. 

But how safe is this project for citizen users? Are we looking at an entity that created an AI problem and now stands to offer a solution for the very problem it caused? Who stands to protect ordinary crypto investors and Citizens in developing nations such as Kenya?

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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