Introduction
After a year-long suspension due to privacy and security concerns, Worldcoin, the Sam Altman-backed iris-scanning initiative, has been cleared by Kenyan authorities. This development marks a significant turn for the company, which had faced intense scrutiny and operational halts.
Initial Launch and Growth
Worldcoin launched in Kenya and Argentina in July 2023 as part of a large-scale identity database creation scheme. The company incentivized individuals with cash rewards to have their iris scanned, collecting biometric details for identity verification. Following its launch, Worldcoin saw its shares surge by over 60%, crossing 2 million digital ID signups in less than a month and averaging about 40,000 daily signups.
Emergence of Privacy Concerns
However, the rapid growth was soon met with privacy concerns. Kenya's data regulator, the Office of the Data Protection Commissioner (ODPC), began assessing Worldcoin’s practices to ensure legal compliance. This led to the suspension of Worldcoin's activities in August 2023, spearheaded by Kenya's interior ministry. Interior Minister Kithure Kindiki expressed concerns over Worldcoin’s data collection methods and warned of potential actions against those involved in its operations.
Government Investigation and Suspension
Following the suspension, Kenyan authorities raided Worldcoin's operational warehouses, confiscating documents and machines linked to the biometric data collection. A 15-member parliamentary committee was formed to investigate the company's operations. During the investigation, a committee member described Worldcoin as "a gang of criminals who are coming to harvest data from young people."
Impact on Worldcoin
The scrutiny led to a significant devaluation of Worldcoin's token, $WLD, with 98.5% of its investors reportedly suffering substantial losses. The drop in value indicated a lack of genuine interest in the token, with many participants motivated by the promise of easy money rather than the project's long-term potential.
Clearance and Resumption
Nearly a year after the initial suspension, the Directorate of Criminal Investigations (DCI) in Kenya has cleared Worldcoin of any wrongdoing. In a letter to Worldcoin's legal team, the DCI stated that the investigation had been "closed with no further police action." The directorate also advised Worldcoin to officially register the business, obtain requisite licenses, and vet its vendors for continued operations.
Response from Worldcoin
Thomas Scott, Chief Legal Officer of Tools for Humanity, Worldcoin’s parent company, expressed gratitude for the fair investigation. He noted that while the closure of the investigation is a positive outcome, it marks the beginning of renewed efforts. “We are grateful for the DCI’s fair investigation and for the Director of Public Prosecutions’ determination to close the matter. This welcome result is, however, not an end but a beginning. We will continue working with the Government of Kenya and others and we hope to resume World ID registration across the country soon,” Scott stated.
Plans for Resumption
With the clearance from Kenyan authorities, Worldcoin is set to resume its iris-scanning operations. The company plans to restart its World ID registration, aiming to create opportunities for people in Kenya and beyond to participate in the global economy. However, the company must navigate the challenges of rebuilding trust and ensuring compliance with local regulations.
Broader Implications
While the clearance in Kenya is a significant milestone, Worldcoin and Tools for Humanity still face pending investigations in other countries. The positive outcome in Kenya could potentially influence similar responses elsewhere, although each jurisdiction will likely conduct its own thorough assessments.
