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The Worldcoin project, launched by OpenAI CEO Sam Altman, has now come under the scrutiny of Germany’s data watchdog. Reuters reported that the Bavarian State Office for Data Protection Supervision is investigating the German subsidiary of the controversial initiative.
The report notes that the probe began in November 2022 and concerns the extensive processing of sensitive biometric data.
Worldcoin Project Remains a Controversial Initiative
Worldcoin scans the iris of users to provide a digital ID and cryptocurrency. According to the website, the project has garnered 2.1 million sign-ups worldwide thus far.
Michael Will, the president of the Bavarian State Office for Data Protection Supervision, expressed apprehension regarding the large-scale processing of sensitive data. Will told Reuters that such processing could pose significant risks, particularly when dealing with highly-sensitive biometric data.
The official said,
“These technologies are at first sight neither established nor well analysed for the specific core purpose of the processing in the field of transferring financial information.”
Contrarily, Worldcoin’s website claims that it preserves privacy and encrypts personal data. While the Cayman Islands registers the global initiative, the EU’s data protection rules govern its European presence.
Check out BeInCrypto’s guide on privacy in web3 and how to safeguard it better: On-Chain and Off-Chain Privacy in Web3: Differences Explained
EU Data Rules Create Strict Framework
Recently, Binance was forced to stop supporting privacy coins after adopting the Market in Crypto Assets (MiCA) rule in the region. Significantly, the MiCA-imposed “travel rule” puts companies at risk if they facilitate several types of crypto trades in the EU legislation.
Therefore, authorities are currently investigating the legitimacy and repercussions of collecting such vast amounts of biometric data.
The controversy surrounding Worldcoin is not confined to Germany. Both France and the UK’s data regulators have expressed concern about the project’s data collection practices. France’s privacy watchdog, CNIL, stated that the legality of Worldcoin’s data collection “seems questionable.”
Similarly, Britain’s Information Commissioner’s Office announced it would further investigate the project.
As the investigations proceed, Worldcoin may have implications for the project itself and for more general discussions about using biometric data and privacy in the digital age.
The WLD token trades close to $2.30 at press time after recording a daily gain of over 3%.