Cryptocurrency Worldcoin: Kenya bans further iris scans

The cryptocurrency project Worldcoin is not allowed to collect any more biometric data from volunteers in the African state of Kenya until further notice. The Kenyan Ministry of Communications said it had legitimate regulatory concerns after an initial preliminary review. Now several authorities would take a close look at Worldcoin. The Worldcoin combines the eponymous Ethereum-based Layer 2 cryptocurrency with a digital ID generated by an iris scan. Behind it is OpenAI boss Sam Altman and the US company “Tools for Humanity”, which he co-founded.

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The heart of the Worldcoin project is an eye scanner, the so-called “Orb”. Anyone who wants to participate in Worldcoin has to sit down personally in front of such an orb, install a mobile phone app with a crypto wallet and have their iris scanned by the orb. A hash value should then be generated from the scan. In Germany, according to a spokeswoman, you can have the Alexa scanned in the Berlin shopping center and in a branch in Erlangen. How the Orb works and what the software does with the iris scan cannot be publicly verified. Worldcoin has disclosed the hardware, but not the firmware on it. After the scan, you will receive a small number of cryptocurrency tokens and a biometrically verified ID with an unclear use.

“I want to register because I’m unemployed and broke”

Kenya’s Communications Ministry leads in its statement several points that made Worldcoin questionable. Security and storage of the sensitive biometric user data are unclear. The model also borders on the influence of rewarding consent to the collection of biometric data with money. There is also a lack of information about standards and measures for the IT security of the project and about consumer protection for cryptocurrency services. And the regulators are also critical of the fact that a private company could collect a massive collection of data on Kenyan citizens.

In Kenya, Worldcoin has apparently led to lively demand for registration. The BBC reports long lines outside one of the pop-up registration centers in the capital, Nairobi. Hundreds had queued there, and many were excluded from registration on Wednesday after the large crowd was described as a “security risk”. “I’ve been coming here to queue and register for almost three days. I want to register because I’m unemployed and broke, that’s why I’m here,” one of those waiting in line told BBC reporters.

German data protection officers also check

Not only the authorities in Kenya have concerns: In Germany, the Bavarian State Office for Data Protection Supervision is responsible for the company behind Worldcoin and has reportedly already initiated a data protection review. Worldcoin is “data processing with high risks for the data subjects”. Data protection authorities from France and Great Britain have also targeted Worldcoin.

Worldcoin communicates its vision as a kind of decentralized inclusion network for the whole world. Regardless of their origin, place of residence and income, people could have a digital identification option. The currency token Worldcoin could in turn be suitable for an unconditional basic income. According to Worldcoin, a total of 2.2 million people have already had themselves scanned, the majority of them during a two-year preparation phase before the official launch this year. In doing so, the focus has obviously been very much on emerging and developing countries.

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The Worldcoin has also been tradable on cryptocurrency exchanges since last week and is currently trading at around 2.3 US dollars. So far, however, only around one percent of the ten billion Worldcoin tokens that have already been generated are on the market. The rest is to be distributed to investors, developers and the community in the coming years according to a distribution key and could then push onto the cryptocurrency exchanges. Anyone who wants to invest in Worldcoin should take this into account.

Updated 8/3/2023 4:02 p.m

In the meantime, heise online has received a statement from Worldcoin. According to a spokeswoman, demand for Worldcoin verification services in Kenya was overwhelming, with “tens of thousands of people” queuing for three days. “As a precaution and in an effort to reduce crowds, verification services have been temporarily paused,” it said. An onboarding program will now be developed that should create “more robust measures to control the crowd”. They also want to work with the local authorities to increase understanding of the data protection measures. Worldcoin apparently expects to resume iris scanning in Kenya soon. In general, the crypto project has a robust data protection program and is also in line with the laws and regulations of the countries in which it is active, such as the GDPR.

(sigh)

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