The Kenya government has suspended WorldCoin in Kenya after thousands of people joined long queues to scan their irises in exchange for a $54 token.
Update: This story has been updated with a statement from the communications authority of Kenya (CA) and and office of the data protection commissioner (ODPC).
The Kenyan government has suspended the operations of WorldCoin, a blockchain product co-founded by OpenAI’s Sam Altman. WorldCoin also operates a crypto wallet called World App and recently began onboarding Kenyans onto its platform. Thanks to a $54 (KES 7,000) token for registered members, the registration process received significant attention.
“The Government is concerned by the ongoing activities of an organisation calling itself ‘WorldCoin,’ which is involved in the registration of citizens through collection of eyeball/iris data. Accordingly, the Government has suspended forthwith, activities of ‘WorldCoin’ and any other entity that may be similarly engaging the people of Kenya until relevant public agencies,” said Kithure Kindiki, Kenya’s cabinet secretary for Interior and National Coordination.
The issue raised by the cabinet secretary was widely discussed after the service’s launch in the country. It was unclear whether WorldCoin was registered in Kenya as a data processor. TechCabal established that WorldCoin had indeed been documented as a data processor by the data protection commissioner (ODPC) office, under the Data Protection Act, 2021. The name of WorldCoin’s parent company is Tools for Humanity, and it is based in Berlin.
The ministry has not given a reason for the suspension even though WorldCoin has been properly registered in Kenya and per the law. It is unclear whether WorldCoin will appeal the suspension, which, up to this point, has been motivated by data privacy concerns. However, this reasoning doesn’t make sense, as Tools for Humanity had already met the requirements of a data processor and was duly registered by the ODPC. It also casts the ODPC in a bad light, as the statement indicates that the agency, alongside others, did not perform due diligence prior to issuing WorldCoin a license to collect biometric data in Kenya.
“Relevant security, financial services, and data protection agencies have commenced inquiries and investigations to establish the authenticity and legality of the aforesaid activities, the safety and protection of the data being harvested, and how the harvesters intend to use the data. Further, it will be critical that assurances of public safety and the integrity of the financial transactions involving such a large number of citizens be satisfactorily provided upfront,” said Mr Kindiki.
“Appropriate action will be taken on any natural or juristic person who furthers, aids, abets or otherwise engages in or is connected with the activities afore-described,” warns a statement from the ministry.
Failure to adhere to the Data Protection Act 2021 provisions attracts fines, with penalties of either KES 5 million ($35,000) or 1% of the company’s annual turnover. Meanwhile, non-compliant individuals may be fined up to KES 3 million ($21,000), imprisonment for a maximum of ten years, or both.
In the same breath, the capital markets authority of Kenya (CMA), a regulatory entity responsible for overseeing, licensing, and monitoring market intermediaries and licensees, has cautioned Kenyan about WorldCoin, stating that it is not regulayted in Kenya. The agency advises citizens to be cautious of potential fraudulent schemes that may arise in the ‘over-the-counter market of cryptocurrency tokens.’
The agency said, “The CMA has assessed the available public information concerning Worldcoin and hereby notifies the public that Worldcoin is not regulated in Kenya. Further, that Worldcoin-related products including crypto-tokens or their derivatives are not investment products within the scope of the Capital Markets Act and hence not under the regulatory purview of the CMA.”
Amidst the confusion, Dennis Itumbi, Kenya’s chief administrative secretary in the ministry of ICT, continues to support the WorldCoin platform, arguing that Kenyans are not wrong with joining the crypto bandwagon. “Just missed a chance to scan and register for @worldcoin – hope there will be another chance to do it. I understand a huge turnout and security concerns led to a pause. There is nothing wrong with taking a risk on crypto. I did on bitcoin and it has been well,” he said.
In a surprising turn of events, the ODPC and Kenya’s ICT regulator, the Communications Authority (CA), have issued a joint statement suspending WorldCoin’s operations. The irony lies in the fact that the ODPC is the same agency that granted a license to Tools for Humanity, WorldCoin’s parent company, to conduct operations in Kenya.
According to the two agencies, WorldCoin’s launch in Kenya has raised urgent regulatory concerns. The CA and ODPC have highlighted issues regarding data security, consent practices, consumer protection, cybersecurity, and citizen data held by private actors without proper oversight.
“Arising from these preliminary observations, a multi-agency investigation is underway. Consequently, and as directed by the Government, the WorldCoin must cease its data collection activities in Kenya until further notice,” says the CA and ODPC.