An investigative committee formed by the Kenyan parliament in August to scrutinize the activities of Sam Altman's cryptocurrency project, Worldcoin, within the East African nation, has issued a recommendation for its cessation.

The committee, as disclosed in a report has called upon Kenya's ICT regulatory body, the Communication Authority, to dismantle Worldcoin's physical and virtual presence, including blacklisting related website IP addresses. This action is to be taken until the country establishes comprehensive regulations governing virtual assets.

These recommendations follow Kenya's earlier suspension of Worldcoin enrollment within its borders in early August due to concerns regarding the "authenticity and legality" of its activities, particularly in the areas of security, financial services, and data protection.

The committee has further urged Kenya to develop a comprehensive oversight framework and policies for virtual assets and virtual asset service providers within six months of the report's adoption, with a requirement to submit these measures to the National Assembly for appropriate legislative actions.

Additionally, the committee has called on the cabinet secretary for the National Treasury to collaborate with relevant stakeholders in crafting regulations and an enforcement infrastructure to ensure adequate regulation and monitoring of virtual assets and their providers. The report is scheduled for presentation before the National Assembly for deliberation and implementation.

Sam Altman's Worldcoin

The report has also recommended initiating criminal investigations into the operations of Tools for Humanity Corp., the company behind Worldcoin, along with Tools for Humanity GmbH in Germany (Worldcoin) and its Kenyan partners, including Sense Marketing. The committee insists on taking "necessary legal action" against these partners for allegedly aiding and abetting criminal activities. An ongoing multi-agency investigation is underway regarding Worldcoin's operations and activities in Kenya, particularly concerning security, privacy, and the legality of using "financial incentives" to obtain biometric data.

The call for an investigation comes after the committee found that Tools for Humanity and its subsidiary had violated Kenyan regulations, including data protection laws, the Consumer Protection Act, and the Computer Misuse and Cybercrimes Act. The committee also concluded that their activities "constituted acts of espionage and a threat to statehood."

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Furthermore, it was revealed that Worldcoin, Tools for Humanity Corp (USA), and Tools for Humanity GmbH (Germany) were not registered businesses in Kenya. The local partners, including Sense Marketing, were also found not to be registered as data processors or controllers despite collecting data on behalf of the crypto project. Worldcoin failed to obtain approval from the ICT regulator to use the Orbs, which it claimed were telecommunication devices, in the country.

In response to inquiries, Tools for Humanity stated,

"We have considerable respect for the time, resources, and perspectives that the report reflects; however, a number of its conclusions or assessments, specifically regarding espionage, are not true. We remain committed to continuing to work with local regulators to address their questions and concerns, and to find a path forward that results in two key outcomes: broader legal reform that encourages further technological development in Kenya for the global technology industry, and a practical resolution that addresses the needs of the hundreds of thousands of Kenyans who rely on World App for daily access to the global economy and who want access to the privacy-preserving and inclusive financial and identity protocol, Worldcoin."

Worldcoin's operations have also prompted a review of Kenya's existing legal framework. The report recommends that the country mandate full disclosure of how companies, acting as data controllers and processors, utilize and store personal and sensitive data collected in Kenya. It also calls for legislative interventions to govern the collection of biodata from Kenyan citizens, emphasizing privacy, security, health concerns, and human rights. Additionally, the report suggests the establishment of a board where the Office of the Data Protection Commissioner reports or accounts for its daily operations.

Worldcoin, known for its ambition to create a new "human identity (global ID) and financial network" through eye scans and its proprietary cryptocurrency, initially launched sign-ups in Kenya. The country quickly became one of the project's major markets, especially after its official launch in late July. However, a surge of individuals visiting recruitment (Orb) stations to claim signup bonuses in the form of "free" crypto tokens caught the attention of government agencies, leading to the suspension of Worldcoin iris scans in Kenya. Notably, Kenya ranks second in Africa (19th globally) in terms of crypto adoption and fifth globally in peer-to-peer exchange trade volume, according to a 2022 Chainalysis report.

The committee's report obstructs Tools for Humanity's plans to resume operations in Kenya and adds to the growing global scrutiny faced by the company, which has also drawn regulatory attention in Europe.

Culled from TechCrunch