Worldcoin, the digital identity and financial services crypto project that verifies people by scanning their irises, has been banned in Kenya, until the government is satisfied that it does not pose any security risks to its citizens.
Interior Cabinet Secretary (CS) Kithure Kindiki said in a statement on Wednesday that the government is concerned about the controversial project, which has so far registered thousands of Kenyans.
Since last week, thousands of Kenyans motivated by the 25 tokens valued at Sh7,786 that the company is offering on registration have been queuing to have their eyeballs scanned.
The collection of biometrics has however been a point of contention with critics pointing out that the Kenyans who have given out their information so far will have no control on what Worldcoin will do with their data.
But in a country where the rate of unemployment is so high, these concerns did not stop Worldcoin from becoming a craze since it landed last week. By last night, at least 350,000 Kenyans, had signed up mostly because of the free money people were getting upon registration.
“Being paid is important but you have to ask yourself why your eyes are being scanned and information gathered. What does it mean and what will it mean to you and your offspring?” Foreign Affairs Cabinet Secretary Alfred Mutua wondered.
Today morning the government decided to pull the plug.
“Relevant security, financial services and data protection agencies have commenced inquiries and investigations to establish the authenticity and legality of the aforesaid activities, the safety and protection of the data being harvested, and how the harvesters intend to use the data,” said Interior Cabinet Secretary Kithure Kindiki.
“Further, it will be critical that assurances of public safety and the integrity of the financial transactions involving such a large number of citizens be satisfactorily provided upfront.”
The suspension of Worldcoin operation by the Kenyan government comes as new revelations show that the company has been using deceptive marketing and exploitation of citizens from developing countries in order to register users.
The company which is owned by ChatGPT CEO Sam Altman has an ambitious plan of registering two million users by 2024. Interestingly it does not have operations in the United States, where its owner comes from. Most of its recruits come from developing countries like Indonesia, Kenya, Sudan, Ghana and Chile.
Worldcoin, which already touts a $1 billion valuation, aims to onboard more people into crypto by doling out free coins to anyone who scans their eyes on a device called “the Orb” that will convert an image of your eyes into “short numeric code” to check whether you already have Worldcoins.
The Orb is about the size of a bowling ball. It’s chrome and shiny and smooth. To register, you are told to stare into a black circle, like how you peer into a machine at the optometrists. The Orb then uses a system of infrared cameras, sensors and AI-powered neural networks to scan your iris and verify that you are a human being.
The World Coin Eye Scan technology processes biometric data locally on the Orb, securely encrypting it across dispersed networks before being saved, according to the company’s official website.1 Once it is received, the information is permanently removed from the World Coin Orb, guaranteeing a high level of confidentiality and privacy.
“To rapidly get its new currency into the hands of as many people as possible,” the project says on its website, “Worldcoin will allow everyone to claim a free share of it.”
An investigation by the MIT Technology Review has however revealed wide gaps between Worldcoin’s public messaging, which focused on protecting privacy, and what users experienced.
The investigation found that “the company’s representatives used deceptive marketing practices, collected more personal data than it acknowledged, and failed to obtain meaningful informed consent.”
According to the investigation, many of the orb operators including in Kenya have been getting paid according to the number of people they recruit and they have no idea about how Worldcoin operates.
The operators who earn Sh100 per every person they sign did not receive any training when they were hired. Their only instruction was to sign as many people as possible. One such operator, Brian Mutyembei said 40 percent of the people who signed up raised concerns about where their data was going to be used.
When he expressed similar concerns, he was assured by a representative that all his questions were addressed in the Worldcoin “white paper.” No such document exists. According to the company, this is by design—people would be unlikely to read “a long, highly technical academic-style paper,” it said, and its shorter blog posts could be thought of as white papers.
Crypto whitepapers are basically a user’s guide that aims to attract investors for the currency. When a new crypto is released, the launching company publishes the details about the currency in the form of a whitepaper. The paper aims to explain commercial, technical, and financial information about the currency.
The companies include facts, statistics, formulas and diagrams about the currency to emphasize the importance of buying this currency. Although writing a whitepaper is not necessary for every company that intends to launch a cryptocurrency, a whitepaper gives a sense of professionalism and legitimacy to the company and the new currency.
Worldcoin does not have a whitepaper and has not cared to open its code for valuation. This means it is basically selling an idea to the world without caring to explain how it works.
Additionally, despite the company insisting that it does not take the personal details of those who register, several students who talked to the ‘MIT Technology Review’ said that orb operators took a photo of their national ID cards to confirm that they were not robots.
Worse, those who registered this week for the free money that they were promised may not be aware that, it is impossible to cash out as the company removed this option from its app last year.
“But with the ability to cash out ending last fall, for now the promise of $20 or $25 worth of Worldcoin amounts to an IOU from the company. Any tokens users may have in their digital wallets are, for all intents and purposes, worthless,” says the Mit Technology Review.
The company which is owned by OpenAI CEO Sam Altman has been heavily criticised over privacy concerns. Still, the company’s website says the project is “completely private” and that data is deleted or a user can opt to have it stored in encrypted form.
Some experts and activists have questioned the necessity and convenience of using the iris as a digital identifier. This is because the scan will produce unalterable biometric data that could be used for malicious or discriminatory purposes.
They have also expressed concerns about Worldcoin storing user data on a centralized server, which could potentially lead to unauthorized access or data leakage.
Transparency and clarity regarding the use and destination of data have also been criticized, as well as the possibility of sharing the data with governments, companies, or external entities.
Additionally, the possibility that billions of people may sign up for World Coin and that their private information will end up in the hands of unauthorized parties on the dark web is a serious threat. The World Coin Eye Scan and World Coin Orb are based on blockchain technology, which is vulnerable to 51% attacks, therefore any data breaches might have disastrous consequences.
There are also no promises that the number of fraud cases won’t increase dramatically after World Coin’s formal debut, despite the company’s active efforts to improve security measures, such as the use of dynamic QR codes during the registration process and the creation of a new recovery mechanism for World IDs.3
One notable critic of Worldcoin is former NSA analyst and whistleblower Edward Snowden, who posted a Twitter thread in October 2021 warning about the risks associated with this project.
“Don’t use biometrics for anti-fraud. In fact, don’t use biometrics for anything,” said Snowden back in 2021.
Despite the criticisms, Worldcoin has managed to attract over two million people from 120 countries who have registered and scanned their iris in exchange for free tokens. The majority of users are young individuals curious about technology and cryptography, seeing Worldcoin as an opportunity to experiment with something new and potentially profitable.
