As Worldcoin sees the highest adoption in most crypto-friendly countries some regulators have voiced regulatory concerns about the project’s privacy. Last month, the Kenya government appointed a parliamentary committee to investigate the operation of Worldcoin due to data privacy concerns.
On Friday, September 27, the appointed parliamentary committee issued a report on Worldcoin activities in the region. A review of the report demonstrates that the legal team has advised the government to suspend the operation of Worldoin in Kenya.
Legislative Committee Advices Kenyan Government to Shut Down Worldcoin Operations
The committee confessed that despite the directives issued by the minister of interior, Mr. Kithure Kindiki, to stop the operation of Worldcoin in the country, the project under probe is still ongoing. The report indicated that Worldcoin continued to register Kenyan residents on the platform despite the orders. The committee considered Worldcoin’s recent operation as a total disregard to the directives issued by the Ministry of Interior in May.
Additionally, the committee blamed Worldcoin for collecting data from minors and violating the privacy laws that protect children. Following the unlawful activities conducted by the Worldcoin team, the committee has advised the government to authorize the disabling of the virtual platforms. Meanwhile, the committee urged the government to block IP addresses linked to Worldcoin projects to enable lawmakers to implement suitable regulations for crypto assets.
After a thorough investigation, the committee noted that despite the court order and restrictive measures imposed by several regulatory agencies, Kenyans are still signing up for the Worldcoin project through the online application.
Worldcoin Violates Government Order in Kenya
Also, the committee has urged the government to conduct regulatory scrutiny on Worldcoin for further legal action. The proposed investigation will involve a criminal inspection to assess the authenticity and legality of Tools of Humanity Corporation, the team behind Worldcoin and Sense Marketing, its Kenyan business partner.
The committee alleges that Worldcoin violated data protection, the Cybercrime Act, and relevant consumer laws. Also, the task force noted that Tools of Humanity Corp. operated as an unregistered entity in Kenya and failed to obtain the approval to use its orb device from the ICT department.
In addition, the committee observed that its Kenyan business partners, Sense Marketing, were neither registered data processors nor collectors.Initially, the Kenyan government raised alerts on the data privacy of the Worldcoin project after thousands turned up for eyeball scanning to receive the free token, worth around $49.
In the eye scanning phase, Worldcoin used the proof of personhood (PoP) device called “orbs” to verify the iris. During the process over 350,000 Kenyans were registered in a day. Even though the number of orbs used in the Worldcoin registration process is still unknown, the crypto incentive motivated many to register.
Regulatory Pressure on Worldcoin Causes WLD Token Price to Plummet
In the recently completed risk assessment on Worldcoin, the committee requested the government to prioritize developing a comprehensive framework for digital assets and virtual assets service providers (VASPs). Guided by the law-making process in Kenya, the parliamentary committee report will be presented before the National Assembly for further legislative assessment and implementation.
In this stage, the cabinet secretary of the national treasury, Professor Njuguna Ndungu, will be tasked to engage other lawmakers and enforcement units to deliberate on practical measures to regulate the crypto sector.
The government has also been advised to consider revising the existing regulations on cybercrime and tax reporting.
In a separate report, the lawmakers warned the government about the risks associated with cryptocurrency adoption due to its unregulated nature. Despite the early warnings Kenya ranks second after Nigeria, with the highest number of crypto adoption in Africa.The report shows that approximately 10% of Kenyans own crypto assets.
The committee report mirrors the regulatory pushback on Worldcoin in France, Germany, Argentina, and the UK that affected the market performance of its native token, WLD. According to CoinMarketCap, the WLD token dropped by 4.28% to trade at $1.63 in a day.
At press time, the WLD daily trading volume decreased by 57.30% to $78999098 in the last 24 hours.