Worldcoin, the cryptocurrency venture backed by Sam Altman, is facing significant legal challenges. On May 5, 2025, a Kenyan court ruled the firm's business illegal, following Indonesia's suspension of its activities a day earlier. These regulatory setbacks have caused Worldcoin's token value to drop by over 5% in the past 24 hours.
The Kenyan High Court, under Justice Aburili Roselyne, issued three orders against Worldcoin Foundation. The court found that the company violated Kenya's Data Protection Act of 2019 by collecting iris and facial biometric data from citizens. Worldcoin has been ordered to erase all collected data within seven days.
The court stated that consent was not legally obtained, as it was incentivized with Worldcoin's cryptocurrency, approximately 7,000 Kenyan shillings per person. The Data Protection Commissioner will oversee the data erasure process to ensure compliance. This legal action was initiated by the Katiba Institute, a Nairobi-based civil society organization.
In Indonesia, the Ministry of Communications and Digital (Komdigi) has suspended Worldcoin's registration. According to officials, the company was operating through unauthorized legal entities. PT Terang Bulan Abadi, associated with Worldcoin, was found to be operating without a valid Electronic System Operator Certificate.
Komdigi stated that noncompliance with registration requirements and identity theft of another legal entity are serious offenses. Another Indonesian partner, PT Sandina Abadi Nusantara, allegedly practiced legal misrepresentation. Alexander Sabar, director general for digital oversight, urged citizens to report unregistered digital service providers.
Market data indicates that the WLD token value fell to $0.88 after reaching a 24-hour peak of $0.96. Open interest in Worldcoin also decreased by over 5%, falling to $219 million. These figures suggest growing investor concern regarding the project's regulatory issues.
Worldcoin uses "Orbs" to scan irises in exchange for cryptocurrency, framing it as a method for establishing digital identities. However, this practice has raised privacy concerns and questions about consent and data security. The timing of these regulatory issues is particularly challenging for Worldcoin, especially after launching WLD ID in the United States and with Coinbase set to list the token.
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