TLDR

• Tools for Humanity, a Worldcoin contributor, has voluntarily extended the suspension of Worldcoin orb operations in Spain until the end of 2024 or until the completion of the GDPR audit by the Bavarian Data Protection Authority (BayLDA).
• The Spanish Data Protection Agency (AEPD) initially ordered Worldcoin to cease operations in Spain in March due to concerns related to the protection of personal data.
• Worldcoin collects people’s irises to authenticate their humanness and creates a digital ID, making them eligible to receive free WLD tokens, which has raised privacy concerns worldwide.
• The project has faced bans and scrutiny in several countries, including Portugal, Kenya, and Hong Kong, due to risks to personal data privacy.
• Worldcoin’s price has plunged 55% since its peak in early March, currently trading at around $4.79.

Worldcoin, the blockchain-based identity verification project co-created by OpenAI CEO Sam Altman, continues to face regulatory hurdles as its suspension in Spain has been extended until the end of 2024 or until the completion of the General Data Protection Regulation (GDPR) audit by the Bavarian Data Protection Authority (BayLDA).

The decision comes amidst growing concerns over the project’s data collection practices and their potential impact on personal privacy.

Tools for Humanity, a key contributor to the Worldcoin project, voluntarily offered to extend the pause of Worldcoin orb operations in Spain, which were initially halted in March following an order from the Spanish Data Protection Agency (AEPD).

The AEPD’s precautionary measure aimed to protect the rights and freedoms of interested parties under Article 66.1 of the GDPR.

The Worldcoin project has been designed to establish a system where individuals can authenticate their humanity by having their eyeballs scanned by a Worldcoin orb, creating a World ID that verifies their personhood.

Participants are rewarded with WLD tokens for undergoing this process. However, the collection and processing of biometric data, specifically iris and facial images, have raised privacy concerns worldwide.

In recent months, Worldcoin has faced scrutiny and bans in several countries, including Portugal, Kenya, and Hong Kong, due to the risks posed to personal data privacy.

The Hong Kong investigation revealed that Worldcoin had infringed the Privacy Ordinance by not specifying whether the submission of personal data by customers was compulsory or not.

In response to these regulatory challenges, Tools for Humanity has taken measures to address data privacy concerns.

The company has been cooperating with the BayLDA, the main authority overseeing data processing under the GDPR, for over a year.

Worldcoin has introduced initiatives such as “Personal Custody,” which prohibits new signups from requesting to have their biometric data stored and encrypted, and has implemented measures to allow users to delete their iris codes and prevent individuals under the age of 18 from signing up.

Despite these efforts, the ongoing investigations and the extended suspension in Spain underscore the complex legal and ethical issues surrounding the use of biometric data for identity verification purposes.

As the demand for technologies that can distinguish between humans and AI-powered bots grows, projects like Worldcoin will need to navigate a challenging regulatory landscape to ensure compliance with data protection laws and alleviate privacy concerns.

The impact of these regulatory challenges has been evident in Worldcoin’s market performance, with the WLD token plunging 55% since its peak in early March. As of this writing, WLD is trading at around $4.79, a slight decline from its 24-hour high of $4.89.

As the BayLDA’s audit nears completion and the AEPD continues to collaborate with its German counterpart, the future of Worldcoin’s operations in Spain and the broader European Union remains uncertain.

The outcome of these investigations will likely set a precedent for the regulation of biometric data collection and processing in the context of identity verification projects, shaping the landscape for similar initiatives in the years to come.

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