Worldcoin — the crypto startup co-founded by OpenAI’s Sam Altman — has been given the green light to resume iris-scanning and other operations in Kenya after a year-long government probe over privacy concerns was dropped.
Kenya was one of the Worldcoin’s launch countries for its iris-scanning scheme — which the startup was building out as the basis of a new identity and cryptocurrency system — but its operations have been halted in the country for nearly a year ago after the program fell afoul of regulators just days into its launch.
Now the country’s Directorate of Criminal Investigations (DCI) has issued a letter, dated June 14 and addressed to the company’s legal team, saying that the investigation has been “closed with no further police action.”
However, it also called on the crypto startup to register the business officially, acquire requisite licenses and vet its vendors “for prudent continued operations.”
The letter caps off nearly a year of suspension and investigation of Worldcoin’s activities. Kenya suspended Worldcoin enrollment shortly after the crypto startup in July last year over concerns around the “authenticity and legality” of its security, financial services and data protection.
Separately, a parliamentary committee, formed in the wake of that suspension, recommended the operation be shut down altogether after running its own investigation and discovering a number of violations.
Specifically, it found that Worldcoin and its umbrella company Tools for Humanity had violated Kenyan regulations concerning data protection, consumer protection, and the computer misuse and cybercrimes act. It also concluded that its activities “constituted acts of espionage and a threat to statehood.”
It further said that Worldcoin, Tools for Humanity Corp (USA) and Tools for Humanity GmbH (Germany) were not registered businesses in Kenya, and that its local partners were not registered as data processors or controllers despite collecting data on behalf of the crypto project. It also said that Worldcoin had also failed to get approval from ICT regulator to use the Orbs, which it said are telecommunication devices, in the country.
It is not yet clear what impact, if any, the parliamentary committee’s shut-down recommendation will have going forward.
“We are grateful for the DCI’s fair investigation and for the Director of Public Prosecutions’ determination to close the matter,” said Thomas Scott, Chief Legal Officer, Tools for Humanity. “This welcome result is, however, not an end but a beginning. We will continue working with the Government of Kenya and others and we hope to resume World ID registration across the country soon. For today, we are just pleased to return our focus to advancing Worldcoin’s mission: creating opportunities for people in Kenya and elsewhere to participate in the global economy.”
It’s also important to note that Worldcoin and Tools for Humanity still face a number of other investigations pending in other countries.
In Europe, the only country where “orbs” are being listed currently is Germany. That could change, however: the data protection authority in Bavaria is currently looking in the company, and we understand that a decision could land as soon as next month, July. Bavaria has led on other GDPR probes because Tools for Humanity has an entity based there. In Spain, where Worldcoin has also paused operations, it has agreed not to relaunch pending that Bavarian DPA investigation.
Meanwhile, Portugal’s DPA has directed its focus on the company’s U.S. entity, and so it is investigating separately.
Separately, Italy has already issued a warning to the company to refrain from any launch at all.
In some regards, the whole situation with Worldcoin highlights potential problems with the tech, but also underscores how ill-prepared many jurisdictions are to cope with new technologies that are being introduced at a fast pace.
While the government committee called on Kenya to disable Worldcoin’s physical and virtual presence “including blacklisting the IP addresses of related websites” until the country establishes proper regulations over virtual assets, in April, Kenya also appeared to start taking steps for more formal processes for evaluating companies like this, forming a multi-agency technical team to develop a regulatory and monitoring framework for virtual asset usage, which would cover crypto startups such as Worldcoin.