Kenya suspends Worldcoin scans over security, privacy and financial concerns – TechCrunch

Image Credits: Worldcoin

Kenya was one of the first countries to launch sign-ups for Worldcoin — the controversial startup that aims to create a new “human identity and financial network” through eye scans and its own cryptocurrency — and as of this week, it was one of the biggest markets for take-up. Now, it could be one of the first to ban it outright.

The country’s Ministry of the Interior has issued a decree suspending Worldcoin enrollment in the country, citing concerns with the “authenticity and legality” of its activities in the areas of security, financial services and data protection. The suspension covers both Worldcoin and “any other entity that may be similarly engaging the people of Kenya” and will remain in place until the authorities determine “the absence of any risks to the general public whatsoever.”

Up until today, Kenya had one of the largest footprints of venues — at least 18, according to the company’s directory last week — where you could visit an “Orb”, as the company’s spherical and mirrored iris-scanners are called, “and verify your World ID.” Now there is only one listed — after Orb operators overwhelmed by the huge turnout, shifted their stations on Sunday to Kenyatta International Convention Centre (KICC), a bigger ground in Kenya’s capital, to accommodate thousands of people streaming in.

(In our direct experience, the list is a little unreliable anyway. In the UK, one of the other countries where regulators are looking into Worldcoin’s privacy and security, three venues were listed in London last week at launch, including one, curiously, in a coffee hut in Kensington Gardens adjacent to Hyde Park. That disappeared after the first day and eventually one of the other locations did, too. Now there is only one in operation.)

“Relevant security, financial service and data protection agencies have commenced inquiries and investigations to establish the authenticity and legality of the aforesaid activities, and the safety and protection of the data being harvested, and how the harvesters intend to use the data,” said Kithure Kindiki, Kenya’s cabinet secretary for the ministry of interior and national administration.

We have reached out to Worldcoin for comment and will update this story with any response.

Worldcoin, co-founded by OpenAI CEO Sam Altman and currently valued at over $2 billion, has raised over $500 million to create a “proof-of-personhood” network.

It’s doing this by registering “verified humans” through the scanning of eyeballs by way of its Orbs, and it’s been luring users to come in for scans by offering them “free” crypto tokens in exchange. Tools for Humanity, the team building Worldcoin, is said to be creating an app that will link up with these global IDs, using Worldcoin tokens for payments, purchases and transfers, alongside other cryptocurrencies and fiat-backed stablecoins.

What is not clear is how the suspension order today will impact the fact that there are now a lot of Worldcoin tokens in circulation in Kenya, which are now being traded around.

The coins have quickly become a part of the grey market that surrounds cryptocurrency especially in emerging economies, which sits far outside the authority of regulators, tax collectors and other government bodies.

After the global official launch last week, locals that had received the tokens could sell them for USDT (the stablecoin pegged to the US dollar) on crypto exchanges, or to “brokers” in exchange for cash. In Kenya, that promise of “free money” quickly spread across the country, leading to an influx of people at the recruitment (Orb) stations, which is what started to draw the attention of government agencies.

It’s worth asking why the authorities didn’t think of this eventuality, or any of the privacy and security implications, before allowing Worldcoin to establish operations in the country in the first place. Kenya — along with Chile, Indonesia, France and Sudan — was one of the first countries to pilot the registration service back in 2021. Regardless, it is now looking at it with clearer eyes: Kindiki says that the suspension is critical for public safety and the integrity of the financial transactions.

The suspension should not come as too much of a surprise: just days ago, the country’s office of the Data Commissioner said it was already conducting an assessment of Worldcoin’s practices in Kenya to ensure compliance with the country’s laws.

Along with the many issues that skeptical peers in the technology industry have been raising about the Worldcoin project and its bigger business ambitions, there are growing concerns about how those efforts to build a biometric database using the promise of free cryptocurrency have exploited economically-disadvantaged people. Again, some of these issues have been there in plain sight for people to see. An MIT Review investigation — published last year — found that it “used deceptive marketing practices, was collecting more personal data than it acknowledged, and failed to obtain meaningful informed consent.”

Worldcoin registration is currently ongoing in 35 cities, and the company is on its way to crossing 3 million users, after enrolling over half a million people in the last seven days, and nearly one million in the last one month alone.