Worldcoin Faces $1.2 Million Fine in Buenos Aires Over Violations

Worldcoin, the digital currency initiative spearheaded by Sam Altman, faces legal challenges in Buenos Aires amid accusations of consumer rights violations.

The Ministry of Production, Science and Technological Innovation of Buenos Aires province has issued an indictment against Worldcoin after detecting allegedly abusive clauses in user contracts.

Buenos Aires Flags Issues with Worldcoin’s Data Practices

Authorities in Buenos Aires have pinpointed discrepancies between Worldcoin’s reported data handling practices and findings from provincial inspections. Undersecretary Ariel Aguilar expressed concerns regarding the storage and immediate deletion of biometric data, underscoring the opacity surrounding these processes and their potential infringement on user rights.

“The intricacy of these agreements, coupled with the innovative nature of Worldcoin’s operations and the dearth of clear information, hampers a comprehensive understanding of the system,” Aguilar remarked.

Inspections have revealed that Worldcoin allegedly fails to inform that only individuals over 18 can use their service, potentially leading to the collection of minors’ data. Moreover, Worldcoin’s biometric data, collected from Argentine users, appears to be stored in Brazil, raising questions about privacy and data sovereignty.

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The contracts, which include terms of use, privacy notices, and data consent forms, seem to contain clauses that might violate national consumer protection laws. Additionally, these include provisions allowing Worldcoin to suspend services without compensation and clauses waiving users’ rights to collective legal action.

The terms also suggest that disputes be resolved under foreign law, specifically that of the Cayman Islands, and through arbitration in California, USA, which clashes with Argentina’s Civil and Commercial Code.

If substantiated, Worldcoin could face a fine of up to 1 billion Argentine pesos ($1.2 million). Buenos Aires authorities assert that the company is currently solely liable for the penalty.

Despite Ban in Spain, Worldcoin’s Daily User Base Reaches 2 Million

In a related development, Spain has imposed a temporary ban on Worldcoin, citing concerns over privacy and data protection. The Spanish data protection authority, AEPD, has called for an immediate halt to Worldcoin’s data collection activities, emphasizing the high risk posed to individuals’ rights by processing biometric data.

The ban follows numerous complaints about the project’s handling of user information, particularly regarding data gathered from minors and the inability to revoke consent.

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Worldcoin has countered by accusing the AEPD of misrepresenting its technology and ignoring EU law. Despite regulatory hurdles, Worldcoin’s World App has experienced substantial user growth, boasting 10 million users and 2 million daily active users worldwide.

However, the crypto project continues to navigate the complex interplay between rapid expansion and regulatory compliance as it strives to maintain its global user base.