Worldcoin Confronts Legal Challenges Across Borders
Worldcoin, a cryptocurrency initiative supported by Sam Altman, finds itself embroiled in significant legal challenges in both Kenya and Indonesia. These developments have sparked concerns about the project’s legitimacy and triggered a notable decline in its token value.
Kenya’s Legal Verdict on Data Protection
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In a landmark judgment on May 5, 2025, Justice Aburili Roselyne of the Kenyan High Court declared Worldcoin’s operations illegal under the country’s Data Protection Act of 2019. The court found that the company unlawfully collected iris and facial biometric data from Kenyan citizens, mandating the deletion of all such data within a week. The Katiba Institute, a civil society group, initiated the lawsuit after Worldcoin incentivized data collection by offering approximately 7,000 Kenyan shillings in cryptocurrency.
The court criticized this practice, stating the consent obtained was invalid due to monetary inducement. The Data Protection Commissioner will oversee the data deletion to ensure compliance with the court’s ruling.
Indonesia Halts Worldcoin’s Operations
In another blow to Worldcoin, Indonesia’s Ministry of Communications and Digital (Komdigi) suspended the company’s activities, citing unauthorized business operations. Investigations revealed that PT Terang Bulan Abadi, a related entity, lacked a valid Electronic System Operator Certificate, while PT Sandina Abadi Nusantara faced accusations of legal misrepresentation. Komdigi emphasized the seriousness of noncompliance with registration regulations and identity theft.
Market Impact and Investor Concerns
The regulatory setbacks in Kenya and Indonesia have had an immediate impact on Worldcoin’s market performance. The value of the WLD token dropped to $0.88 from a 24-hour high of $0.96, reflecting growing investor anxiety. Open interest in Worldcoin decreased by more than 5% to $219 million, highlighting the project’s precarious position amidst these legal challenges.
This downturn comes at a critical time for Worldcoin, following its recent launch of WLD ID in the United States and anticipated listing on Coinbase. Despite these bullish moves, regulatory issues have overshadowed the project’s progress.
Government Responses and Public Concerns
The governmental actions in Kenya and Indonesia appear to be responses to mounting public concerns over Worldcoin’s data collection practices. In Kenya, authorities had previously halted registration efforts due to long queues and related security and privacy issues. Meanwhile, in Indonesia, the Director General for Digital Oversight, Alexander Sabar, encouraged citizens to report unauthorized digital service providers, emphasizing the importance of maintaining a secure digital environment.
Worldcoin’s use of Orbs to scan individuals’ irises in exchange for cryptocurrency has raised privacy and consent issues, prompting scrutiny and regulatory intervention. While the company promotes this as a means to establish digital identities, questions about the safety and ethical implications of biometric data collection persist.
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