Regulators hound Worldcoin digital ID project as it expands in Latin America | Biometric Update

admin | Posted on May 3, 2024 |

Worldcoin continues to take its iris biometrics and digital identity scheme into new territories – and, like clockwork, trigger alarms among governments who remain unclear on exactly what the company is doing with the biometric data it collects. Latin America is the latest hot zone, as Argentinian legislators push to regulate Worldcoin’s activities, and Mexican politicians seek clarity on data protection ahead of the opening of new iris scanning locations.

Diputados Bonaerenses reports that MP Carlos Puglelli has presented a proposal to the Buenos Aires Legislature to establish a clear regulatory framework for iris scanning initiatives. Puglelli is looking to ensure user data protections are in place, with enforceable penalties for non-compliance. His initiative proposes establishing a Provincial Registry of Digital Applications of Biometric Data, which defines a range of potential sanctions ranging from economic penalties to the withdrawal of permits.

“It is essential to adapt our legislation to the challenges posed by the digital age,” Puglelli says. “This law seeks to protect the rights of consumers and users in an increasingly digitalized environment, ensuring the privacy and security of their data.”

Also at issue is clear user consent, which critics say is not explained clearly enough in Worldcoin’s agreement. The addition of payola to the mix further complicates matters: part of Worldcoin’s success hinges on offering a certain amount of cryptocurrency in exchange for an iris scan and the creation of a “World ID” digital identity. Some say this muddies the waters of free, express and informed consent. An article in Rest of World paints a picture of reluctant registrants in Argentina forced into trading biometrics for money to fight soaring rates of inflation and unemployment. The specter of predatory opportunism hovers over its operations in nations seized by economic crisis.

Furthermore, Worldcoin and its parent company, Tools for Humanity, are based in the Cayman Islands, putting them outside of regional jurisdictions. Puglelli’s proposal would require biometrics businesses to have “a domicile in the Buenos Aires territory.”

Worldcoin, which is co-owned by Silicon Valley maverick Sam Altman, operates more than 50 iris-scanning outlets in Argentina. This is not the first call from politicians to investigate the company’s activities. The country’s national data protection agency launched its own investigation into Worldcoin back in January. The province of Buenos Aires has already threatened Worldcoin with a fine of up to one billion Argentine pesos (~US$1.15 million) for including “abusive clauses” in its customer agreements. Puglelli’s colleague, provincial deputy And Romina Braga, has also asked the country’s leadership to press Worldcoin to clarify its intentions. “Today it is unclear what the company does with iris scans,” she says. “WorldCoin does not have legal status in Argentina and is acquiring biometric data in a way where privacy is at stake.”

Regardless of the doubter’s chorus, Worldcoin soldiers on. In a post on X (née Twitter), the firm says it is expanding its operations in Mexico. “Increased access to World ID’s verified proof of humanness is coming to Mexico,” says the post. This means more iris-scanning Orbs will be deployed in Mexico City, Monterrey and Guadalajara.

On cue, legislators are raising red flags. Criptonoticias reports that, on April 15, Congressional representative María Eugenia Hernández requested a formal evaluation of the data protection practices and potential impacts of Worldcoin’s iris biometrics project.

The company already operates nine scanning centers in Mexico. The new additions will further enlarge its footprint in Latin America, which also includes 21 biometric scanning centers in Chile.

While it may appear to have taken an aggressive approach to this point, the company is showing signs that it may be getting the message about privacy concerns. In Malaysia recently, its executives met with Prime Minister Anwar Ibrahim and other government officials in advance of setting up Orbs in the country.

Meanwhile, no one can deny the company’s impressive growth from rapid adoption. The company already has 10 million users, half a million of which are in Argentina. To scale up its Latam operations, it is currently hiring for roles in communications, customer experience and market operations. It is exploring partnerships with OpenAI and PayPal. And it is making more Orbs, as its supply of the spherical biometric capture devices runs low.

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