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Worldcoin Under Global Investigation: South Korea Imposes $830K Fine

Last Updated September 26, 2024 8:30 AM
Prashant Jha
Last Updated September 26, 2024 8:30 AM
By Prashant Jha
Verified by Insha Zia

Key Takeaways

  • Worldcoin regulatory troubles have only intensified this year. 
  • Singapore is investigating Worldcoin for allegedly violating its Payment Services Act.
  • Also, South Korea fined Worldcoin and its development firm, Tools for Humanity.
  • Worldcoin is facing regulatory troubles from over a dozen countries.

Worldcoin (WLD) faces intense scrutiny over its unconventional iris-scanning-based business model.

The Sam Altman-founded project is now under investigation in Singapore, the latest country among many to scrutinize its activities.

South Korea Fines Worldcoin

South Korea’s Personal Information Protection Commission (PIPC)  has levied a fine of 1.1 billion Korean won ($830,000) on Worldcoin and its development firm, Tools For Humanity, for alleged violations in collecting and transferring personal data.

The PIPC found that Worldcoin did not adequately inform users about the purpose of collecting and storing their iris data. Additionally, the foundation failed to provide a Korean translation of its biometric data consent form until after March 22.

South Korea fines Worldcoin
South Korea fines Worldcoin for over $800,000. l Credit: Personal Information Protection Commission

For these violations, Worldcoin received a 725 million won ($545,000) fine, and Tools For Humanity received a 379 million won ($285,133) penalty for its role in the overseas transfer of data.

Both entities were criticized for not informing users about the country where their personal information was being transferred and for failing to provide a mechanism for users to request the deletion of their iris data. Moreover, PIPC said Tools For Humanity had insufficient age verification measures until April.

Singapore Investigates

The Singapore police are investigating Worldcoin for allegedly violating the country’s Payment Services Act.

Deputy Prime Minister Gan Kim Yong revealed in a written response to questions from Members of Parliament Rachel Ong and Derrick Goh that the police are investigating seven individuals suspected of buying and selling Worldcoin accounts and token trading services. The police have arrested five people in connection  with the case.

The MPs had expressed concerns about the potential regulatory implications of selling Worldcoin accounts to third-party agents.

Gan stated that the police are actively probing the sale of Worldcoin accounts to third parties, which is illegal under Singaporean law because Worldcoin does not qualify as a payment service provider.

The investigation also looks into concerns that Worldcoin accounts may be used for illicit purposes, such as money laundering and terrorism financing.

Worldcoin denied reports of a Singapore investigation and claimed the Singapore police are investigating individuals not affiliated with the company. A spokesperson from Tools of Humanity told CCN:

“Neither Worldcoin nor Tools for Humanity are under investigation by police in Singapore. Individuals being investigated by authorities for possible violation of the Payment Services Act are not affiliated with Worldcoin or its operations. Any reports or speculation to the contrary are false and misleading.”

Gan warned the public to exercise caution when dealing with individuals involved in buying and selling Worldcoin accounts. According to him, these activities could end up being illegal.

Worldcoin’s Regulatory Woes Spread Globally

A year after promising to create a revolutionary global ID system, Worldcoin faces a barrage of regulatory challenges worldwide.

The project’s ambitious plans to build a massive, privacy-preserving financial network have been hampered by bans and investigations from authorities in over half a dozen countries.

Worldcoin had rapidly expanded its Orb scanning centers to 35 cities across 20 countries.

However, its regulatory troubles began almost immediately, with countries like India, Korea, Brazil, and France expressing concerns about privacy and regulatory compliance.

In recent months, the project’s woes have only intensified. In March, Portugal and Spain temporarily banned Worldcoin’s scanning activities in their countries. Then, in August, Colombian authorities accused Worldcoin of breaching privacy laws, with the country’s financial regulator filing charges against the Worldcoin Foundation.

List of Countries Investigating Worldcoin

Country Regulatory Trouble
India Worldcoin rolled back orb-scanning in India weeks after launch, citing scalability concerns in 2023.
UK The UK’s Information Commissioner’s Office (ICO) announced  an investigation of the project in 2023.
Argentina In August 2023, the Argentinian data protection authority (AAIP) investigated Worldcoin for violating its data protection law.
Hong Kong Hong Kong regulators stopped  Worldcoin’s data collection in May 2024, citing privacy concerns.
South Korea South Korean regulators fined Worldcoin after pausing  its operations, citing privacy concerns.
Germany German regulators were among the first to launch an investigation into Worldcoin over its data collection.
Spain Financial regulators in Spain stopped  Worldcoin from collecting iris data in March 2024.
France French authorities were among the first regulators to question Worldcoin’s operational model.
Brazil Brazil was among the early countries where Worldcoin stopped operations without citing clear reasons.
Singapore Singapore police began investigating Worldcoin in August 2024.
Columbia Colombian regulators launched an investigation  into Worldcoin in August 2024.
Kenya Worldcoin was initially investigated in Kenya for illegally collecting users’ personal data, but the Kenyan police have since dropped  the case.

The company’s shift from a non-profit organization to a for-profit entity has also raised eyebrows. Its founder, Sam Altman, has drawn attention for his lavish spending habits, including a high-profile spree of purchasing fancy cars.

Worldcoin claims to prioritize user privacy by using zero-knowledge proofs (ZKPs) and an open-source protocol called Semaphore. Despite these assurances, regulators continue to express concerns about the project’s operations.

CCN reached out to Worldcoin for comment but did not receive a response at the time of publishing.

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