Kenya suspends Worldcoin scans over security, privacy and financial concerns

Kenya suspends Worldcoin scans over security, privacy and financial concerns

Kenya was one of the first countries where Worldcoin — the controversial startup that aims to create a new “human identity and financial network” through eye scans and its own cryptocurrency — launched sign-ups. As of this week, it was one of the biggest markets for takeup. Now Kenya 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 collections 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 that could accommodate the thousands of people streaming in.

(In our direct experience, the list is a little unreliable anyway. In the U.K., 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.

In a statement Worldcoin Foundation positioned the suspension as temporary saying the “pause” will enable it to come-up with better onboarding processes, and to engage with Kenyan officials on the concerns they raised including privacy, and data protection (more here).

Worldcoin, co-founded by OpenAI CEO Sam Altman raised $115 million from Blockchain Capital early in the year.

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 and currency, and an app enabling payments, purchases and transfers using its tokens alongside other cryptocurrencies and fiat-backed stablecoins.

After the global official launch last week, locals who had received the tokens could sell them for USDT (the stablecoin pegged to the U.S. 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.

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 being traded around.

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

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 Protection 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. 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.

Updated at 03:51 Thursday, 3 August 2023 Eastern Time to include a comment from Worldcoin Foundation, and Alex Blania’s tweet.

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