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Value loss, regulatory heat and data leak: Worldcoin runs into headwinds

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Worldcoin, which issued a whitepaper during its launch, describes itself as a digital passport that can help the WLD holders prove that they are human

Sam Altman, CEO of the tech firm OpenAI (which brought out a groundbreaking AI generative tool called ChatGPT in 2023), recently hit the headlines by introducing Worldcoin, a crypto token with privacy being the key focus area, as the WLD took the crypto ecosystem by storm.

However, a revelation now states that the hype around Worldcoin has not been reflected much in the Return-on-Investment (ROI) percentage of its investors. Recent data accessed by Technext shows that over 98.52% of WLD investors are “currently counting their losses”, as within just a month, Worldcoin tokens have lost about 52% of their market value.

The latest trouble comes amid the virtual currency facing regulatory issues globally. The project is currently under investigation in Kenya, Argentina, Germany, the United Kingdom and elsewhere, with debate breaking out over Worldcoin’s privacy and critical biometric data safety.

Worldcoin, which also issued a whitepaper during its launch, describes itself as a digital passport that can help the WLD holders prove that they are human. This will be achieved through the privacy-centric digital identity called ‘World ID’.

This World ID and the native token WLD can be acquired through simple verification of being a genuine human being.

According to data from CoinMarketCap, WLD traded at USD 2.2 around the first week of August 2023. However, the value came down to USD 1.06 in the next month. This shows that WLD has lost over 50% of its value within 30 days.

Data analytic firm IntoTheBlock also said that 98.52% of the current Worldcoin investors are currently in losses. This data indicates that just less than 2% of the token holders have made gains since July 2023.

While Kenya halted the project’s activities in its jurisdiction by citing controversial biometric scans of its citizens, Worldcoin witnessed a significant rise in its popularity and demand in Argentina.

The project reportedly crossed a major milestone with its ID verification in the South American country, as it signed up over 9,500 users in a single day in August, thereby setting a new record for single-day sign-ups.

“With the way the $WLD token is structured, it is not likely that the token would get genuine demand from investors which would propel a price surge. Most of the token holders got them as rewards, after having their eyeballs scanned by Worldcoin orbs at designated locations. And what happens after is that they convert the $WLD token to fiat immediately or soon after the scanning, and move on with their lives,” the Technext report observed.

Some 350,000 Kenyans, who lined up to get their eyeballs scanned by Worldcoin orbs located at the supermarket chain Quickmart’s Nairobi outlets, signed up with the project in the hope of getting free WLD tokens worth around 7,000 Kenyan shillings (USD 49.09).

The Kenyan residents then immediately converted the tokens to USDT before eventually converting the stablecoins to Kenyan shillings.

The Kenyans were reportedly interested in getting their eyeballs scanned for the pursuit of earning easy money via the Worldcoin tokens, as a certain Brian Mwangi, one of the WLD token recipients, told Bitcoin.com in August, “I was here by 5 am because there has been a lot of talk on TikTok and Instagram about the free money Worldcoin is giving all those who download their app and subscribe, we are for the iris scanner so that we can be sorted.”

Kenya now has warned its citizens to be cautious while giving their data to private companies, as the East African country was concerned about how the biometric data was getting stored, apart from “a private company offering money in exchange for citizens’ confidential data”.

The nation has now launched an investigation into Worldcoin and called on security services and data protection agencies to establish the project’s authenticity and legality.

Worldcoin, in response, told the media that it was planning to implement crowd-control measures and collaborate with the Kenyan government before resuming work.

Also, France’s data watchdog recently carried out “checks” at Worldcoin’s Paris office, as it felt that the legality of these biometric data “seemed questionable”.

To make matters worse, in May 2023, reports surfaced about hackers installing password-stealing malware on the devices of Worldcoin Orb operators.

TechCrunch learned about Worldcoin operators getting their personal devices compromised by password-stealing malware, such as the RedLine information stealer, to steal all of the credentials saved in their browser, including login details for the operator app.

Credentials of at least seven Orb operators were listed on the dark web. These included credentials that gave hackers full access to the Worldcoin Orb operators’ dashboard, which lacked security features like two-factor or multi-factor authentications.

Image Credit: https://commons.wikimedia.org/

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