365Crypto
Worldcoin Faces Scrutiny Over Potential Misuse
Singapore is currently investigating unauthorized sales of Worldcoin accounts, raising concerns about potential criminal activities like money laundering and financing terrorism. Worldcoin, a controversial cryptocurrency project, collects identity data using its “orb” device, which scans users’ retinas to verify their identities. In exchange, verified users receive special benefits.
This project, founded by Sam Altman of OpenAI fame, runs on a layer-2 Ethereum blockchain using the Optimism OP stack, a framework designed to make transactions faster and cheaper. What sets Worldcoin apart is its focus on prioritizing real humans over potential AI bots. But apparently cheaters have already found a way around the system, by simply buying verified accounts.
Government Crackdown on Unlicensed Sales
On September 9, Singapore’s Deputy Prime Minister and Chairman of the Monetary Authority of Singapore (MAS), Gan Kim Yong, revealed that local authorities were investigating seven individuals involved in selling Worldcoin accounts and tokens without proper licenses. Under Singapore’s Payment Services Act of 2019, offering such services without approval is illegal.
According to Yong, while Worldcoin itself doesn’t provide payment services under the act, people who buy or sell Worldcoin accounts or tokens as a business could be considered to be doing so. These accounts, sold illegally, are at risk of being used for activities like money laundering or terrorist financing.
Global Concerns Over Worldcoin’s Data Practices
Worldcoin’s method of collecting biometric data, specifically iris scans, has sparked concern worldwide. In 2023, several countries, including India, South Korea, Kenya, Germany, and Brazil, halted iris data collection to investigate potential issues around privacy and data security.
In Europe, Worldcoin has faced regulatory pushback for possibly violating the General Data Protection Regulation (GDPR). Spain became the first country to officially ban the company’s biometric data collection on March 18. Despite these obstacles, Worldcoin has rapidly grown, reaching over 10 million users by April 2023.
Singapore’s Warning Against Selling Worldcoin Accounts
On August 7, Singaporean police issued a public warning against selling or giving away Worldcoin accounts. Yong reiterated this in a parliamentary meeting, advising the public not to transfer access to their Worldcoin accounts or digital payment token wallets. He cautioned that third parties could misuse these accounts.
Yong emphasized that organizations handling sensitive personal data, such as biometric information, must follow Singapore’s strict data protection and security guidelines to prevent criminal misuse.
Technical Terms
- Layer-2 Ethereum blockchain: A secondary framework built on top of the Ethereum network to improve scalability and reduce transaction costs.
- Optimism OP stack: A set of tools and protocols that help build efficient, fast, and low-cost blockchains, especially in conjunction with Ethereum.
- Payment Services Act (PS Act) 2019: Singapore’s law regulating payment services, including cryptocurrency, to prevent illegal activities like money laundering.
- General Data Protection Regulation (GDPR): A European Union regulation designed to protect individuals’ personal data and privacy across all member states.
