Legal Challenges Mount for Worldcoin
Crypto News – The digital currency venture, Worldcoin, led by Sam Altman, finds itself entangled in legal disputes in Buenos Aires, facing accusations of infringing consumer rights.
The Ministry of Production, Science, and Technological Innovation of Buenos Aires province has brought forth charges against Worldcoin, citing the discovery of potentially abusive clauses in user agreements.
Issues regarding Worldcoin’s handling of data practices have been flagged by authorities in Buenos Aires. Undersecretary Ariel Aguilar expressed apprehension regarding the storage and immediate deletion of biometric data, highlighting concerns about the lack of transparency in these procedures and their possible encroachment on user rights.
Aguilar remarked, “The complexity of these agreements, alongside the innovative nature of Worldcoin’s operations and the lack of clear information, impedes a thorough comprehension of the system.”
Inspections have uncovered that Worldcoin may have failed to notify users that only individuals aged 18 and above are eligible to use their service, potentially resulting in the collection of data from minors. Additionally, biometric data from Argentine users appears to be stored in Brazil, prompting inquiries about privacy and data sovereignty.
The contracts, encompassing terms of service, privacy policies, and data consent forms, appear to contain clauses that could contravene national consumer protection laws. These clauses include provisions permitting Worldcoin to suspend services without compensation and clauses waiving users’ rights to collective legal action.
Moreover, the terms suggest that disputes should be resolved under foreign law, specifically that of the Cayman Islands, and through arbitration in California, USA, which conflicts with Argentina’s Civil and Commercial Code.
If proven true, WLD could face fines of up to 1 billion Argentine pesos ($1.2 million). Buenos Aires authorities assert that the company is solely responsible for the penalty.
In a parallel development, Spain has imposed a temporary ban on Worldcoin, citing concerns about privacy and data protection. The Spanish data protection authority, AEPD, has demanded an immediate cessation of Worldcoin’s data collection activities, emphasizing the significant risk posed to individuals’ rights by the processing of biometric data.
The ban comes in response to numerous complaints regarding the project’s handling of user information, particularly concerning data obtained from minors and the inability to withdraw consent.
WLD has pushed back, accusing the AEPD of distorting its technology and disregarding EU law. Despite regulatory obstacles, Worldcoin’s World App has witnessed substantial user growth, boasting 10 million users and 2 million daily active users worldwide.
However, the cryptocurrency project continues to navigate the intricate balance between rapid expansion and regulatory compliance as it strives to sustain its global user base.
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