Worldcoin (WLD) Suffers a Major Setback in Kenya as the Country's High Court Rules Against Its Biometric Data Collection Practices

The digital identity and cryptocurrency project Worldcoin (WLD), backed by OpenAI CEO Sam Altman, has been dealt a significant legal and financial blow in Kenya.

This follows nearly two years of legal proceedings by the Katiba Institute, a local constitutional advocacy group, which ultimately led to the High Court ruling that Worldcoin violated the constitutional privacy rights of Kenyan citizens.

The Impact on Worldcoin’s Biometric Data Collection

In a judgment issued on May 6, Justice Aburili Roselyne granted a judicial review application, declaring that Worldcoin’s data collection approach breaches Kenya’s Data Protection Act, 2019.

The ruling has wide-ranging implications. It prohibits the Worldcoin Foundation and its partners from any further processing, collection, or dealing with biometric data in the country.

It is noteworthy that the court ordered the deletion of all previously gathered biometric information within a seven-day period. The Office of the Data Protection Commissioner (ODPC) will oversee the enforcement of this directive.

According to court documents, Worldcoin had failed to obtain legitimate consent and had bypassed the required Data Protection Impact Assessment (DPIA) prior to undertaking its biometric registration activities.

The project, which offers users around $50 in WLD tokens for scanning their irises using a device called the Orb, has faced criticism in multiple jurisdictions for its data practices.

However, the Katiba Institute successfully argued that this monetary incentive is an inducement, thus rendering the consent invalid.

Constitutional lawyer Joshua Malidzo Nyawa, who spearheaded the legal challenge, maintained that Worldcoin’s approach to data collection does not meet the legal standards set by Kenya’s data protection laws.

Digital rights group ICJ Kenya hailed the ruling as a landmark victory in the battle for personal data sovereignty.

“This is a huge win for digital rights in Kenya. The court's decision reaffirms the country's commitment to protecting fundamental rights in the digital age, especially the right to privacy, which is expressly guaranteed by the Constitution of Kenya,” said Ben Wajanja, Programs Manager at ICJ Kenya.

The ruling has significant implications for Worldcoin’s operations in a major African market.

Recently, Indonesia also halted Worldcoin’s activities over similar concerns, while lawmakers in several nations are scrutinizing the project’s model, which harvests sensitive biometric information in return for cryptocurrency.

Kenyan political figures have also been critical of the project. National Assembly Majority Leader Kimani Ichung’wah questioned why a program restricted in its founder’s home country is allowed to operate freely in Kenya.

“The owner of Worldcoin, Sam Altman, is banned from collecting this data in the US. Why do we allow him in Kenya?” asked Ichung’wah during a recent parliamentary debate.

Despite this backlash, Worldcoin is expanding in other regions. In the US, the project is rolling out in six major cities, including Los Angeles, Atlanta, and San Francisco.

As Worldcoin faces an uphill battle in key markets, the immediate impact on investor sentiment is significant. Following news of the court ruling, Worldcoin’s native token, WLD, plummeted by nearly 10% within 24 hours.

At the time of writing, the token was changing hands at around $0.88, showing a substantial drop from its recent highs. This plummet highlights investor anxieties around escalating regulatory headwinds and potential financial liabilities linked to the project’s data practices.

For a platform touted as a decentralized and user-controlled identity system, this ruling presents not only legal but also reputational challenges.

With regulatory scrutiny intensifying and global watchdogs tightening data governance laws, Worldcoin now faces a critical juncture in demonstrating it can operate ethically and in compliance with the diverse legal frameworks across the jurisdictions where it operates.

It remains to be seen whether the Kenya decision will serve as a blueprint for further legal actions against Worldcoin in other parts of the world. But one thing is clear: the road ahead for Worldcoin is becoming increasingly difficult to navigate.