A Kenyan parliamentary panel has recommended the shutdown of Worldcoin in the country due to concerns about the 'authenticity and legality' of its operations in the digital identity, financial services, and data security domains. An ad hoc committee of 18 legislators was set up in August to scrutinise the activities of Worldcoin, Sam Altman's crypto venture. The lawmakers called on Kenya's ICT regulator, the Communication Authority, to ban Worldcoin's physical and virtual presence, including blocking the IP addresses of related websites, until relevant rules on digital assets are in place in the country. The panel also urged the government to immediately take action and launch criminal probes into 'Tools for Humanity Corp', a company co-founded by OpenAI CEO Sam Altman to produce Worldcoin, and its Kenyan partners, including Sense Marketing. The report should be presented and discussed soon at the Kenyan National Assembly.

Why does it matter?

The lawmaker's report highlights several pending issues with digital identity and data privacy in the crypto industry. The recommendations come as Kenya ordered Worldcoin to stop all registration in the country in early August as a result of complaints about Worldcoin's biometric scan of users' iris in exchange for a digital ID linked to a new 'identity and financial network'. In total disregard for the government's order, Worldcoin kept on collecting Kenya's residents' personal data virtually, with no age verification process. In addition to the shutdown of the operation, the recommendations include:

'implementing a comprehensive framework for digital assets and virtual asset service providers; amending existing regulations to consider cybercrimes and tax reporting requirements; and providing a requirement for full disclosure on how companies will utilize and store personal and sensitive data collected in Kenya.'

Worldcoin has also come under the radar of British, German, and French regulators. A shutdown would restrict Worldcoin's development plans and could impact its reputation, set a precedent, and inspire other countries to follow Kenya's legislative action.