Worldcoin, the ambitious crypto startup co-founded by OpenAI's Sam Altman, has been given the go-ahead to restart its iris-scanning operations in Kenya. After a grueling year-long government investigation probing privacy concerns, the Directorate of Criminal Investigations (DCI) announced the cessation of the probe with 'no further police action.'

Kenya was among the first countries where Worldcoin launched its innovative iris-scanning scheme. The project aimed to establish a new identity and cryptocurrency system. However, regulators quickly halted the operations, raising concerns over the scheme's security, financial services, and data protection integrity just days after its inception.

Kenya's Initial Reaction and Suspension

A pivotal letter dated June 14 from the DCI to Worldcoin's legal team indicated that while the investigation had concluded, the startup must still undergo official business registration, acquire necessary licenses, and vet its vendors for continued operations.

Parliamentary Committee's Findings

The halt in operations was compounded by a parliamentary committee's extensive investigation, resulting in recommendations to shut down Worldcoin entirely. The committee cited multiple violations:

1. Contraventions of Kenyan data protection laws
2. Breaches of consumer protection regulations
3. Infringements under the computer misuse and cybercrimes act

The committee also characterized Worldcoin's activities as acts of espionage and statehood threats, further noting that the involved entities—Tools for Humanity Corp. (USA) and Tools for Humanity GmbH (Germany)—lacked registration in Kenya. Additionally, they highlighted that local partners had not registered as data processors or controllers despite their data collection duties.

The Road Ahead for Worldcoin

Despite these findings, the impact of the parliamentary committee's shutdown recommendation remains unclear. In response, Thomas Scott, Chief Legal Officer at Tools for Humanity, expressed gratitude for the DCI's impartial investigation. 'We are pleased to return our focus to advancing Worldcoin’s mission, creating opportunities for people in Kenya and worldwide to engage in the global economy,' he said, emphasizing the company's intent to collaborate with the Kenyan government and resume World ID registration soon.

Thomas Scott's Statement

We are pleased to return our focus to advancing Worldcoin’s mission, creating opportunities for people in Kenya and worldwide to engage in the global economy.

Thomas Scott, Chief Legal Officer at Tools for Humanity

Ongoing Global Investigations

While Kenya has decided to lift its suspension, Worldcoin continues to face scrutiny in other regions. In Germany, the data protection authority (DPA) of Bavaria is investigating complaints about Worldcoin, with a decision expected soon. This scrutiny has led the company to halt operations in Spain, pending Bavarian DPA’s conclusions.

Similarly, Portugal's DPA is examining the company's U.S. entity and has temporarily banned Worldcoin's operations. Meanwhile, Italy's DPA issued a preemptive warning, cautioning against any launch without facing sanctions.

Technological Challenges and Regulatory Actions

Worldcoin's controversies underscore the difficulties jurisdictions face in managing fast-paced technological advancements. Although the Kenyan committee advocated for disabling Worldcoin’s presence until proper regulations were established, the government has concurrently taken steps to form a multi-agency technical team. This initiative aims to develop a regulatory framework for virtual asset usage, encompassing crypto startups like Worldcoin.

Conclusion

Worldcoin’s journey in Kenya, filled with regulatory challenges and investigative scrutiny, highlights the complex terrain new technologies must navigate. As the company continues to expand globally, the extent of collaboration between innovative crypto startups and regulatory bodies will likely define the future landscape of virtual assets.