Worldcoin crypto already under scrutiny in Europe

LESS than a week after its launch, the Worldcoin crypto project of OpenAI chief executive Sam Altman is already under scrutiny by European regulators over its reliance on an eye scan to verify a user’s identity, France’s data protection agency said last Friday (Jul 28).

Worldcoin’s launch on Monday comes as the cryptocurrency industry is suffering hard times after the spectacular collapse of FTX and various legal cases against the sector’s biggest players.

Using eye scans, it tries to solve one of the main challenges facing the crypto industry: a level of anonymity so high that makes it vulnerable to scams and spam bots – which artificial intelligence (AI) threatens to make exponentially worse.

But Worldcoin’s collection of biometric data could run afoul of strict data privacy rules in Europe.

“Worldcoin has begun to collect data in France... which seems questionable as does the conservation of biometric data,” France’s Cnil data regulator told AFP.

After conducting an initial review, Cnil said it identified its counterpart in the German state of Bavaria as the lead agency in Europe to conduct a probe into Worldcoin, and said it supports their investigation.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

Worldcoin in fact began operating in June in Germany, which is the home country of co-founder Alex Blania.

Bavaria’s data protection agency had no immediate comment when contacted by AFP on Friday.

With its cryptocurrency and identification system, Worldcoin aims to create the “world’s largest identity and financial public network”, according to its website.

SEE ALSO

Crypto trading bots are taking over Telegram

Altman and Blania said last week in a letter posted to Twitter, which is being renamed X, that the Worldcoin offers “a reliable solution for distinguishing humans from AI online while preserving privacy”.

This will in turn enable Worldcoin as a blockchain-based technology to drastically increase economic opportunity and enable democratic processes.

Blockchains are distributed databases that facilitate the verification and traceability of transactions.

They can offer lower costs and faster data transfer while ensuring secure transactions, although the most famous blockchain that powers the cryptocurrency Bitcoin is notorious for being slow and expensive as it requires huge computer processing power to validate transactions as part of its system to reward processors with new bitcoins.