22nd February 2024 4:47 pm
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Kenya to regulate cryptocurrencies after Worldcoin debacle

  • Kenyan authorities are looking to launch regulations around cryptocurrencies and other virtual assets in the next six months if a report is adopted.
  • This report is on the activities of Sam Altman’s Worldcoin crypto firm in Kenya which has been under intense scrutiny from the country’s government.
  • The same report recommends that Worldcoin’s operations be terminated in the East African nation.

The Kenyan government could be looking to regulate cryptocurrencies as a parliamentary committee has recommended that the country develop “a comprehensive oversight framework and policies on virtual assets and virtual assets service providers in Kenya.”

These recommendations were made in a report compiled after authorities investigated the operations of cryptocurrency firm Worldcoin in the East African nation. The report calls for the implementation of the policies within six months of the adoption of the report.

A few months after Kenyan authorities seized assets belonging to Worldcoin, a cryptocurrencies firm founded by OpenAI’s Sam Altman, the same parliamentary committee has called for the shut down of Worldcoin’s operations in Kenya.

In August law enforcement officials raided a warehouse in Nairobi where they seized several Worldcoin “orbs,” machines that the firm uses to store data from potential crypto buyers. The Worldcoin cryptocurrency launched in July 2023 and over two million people across the globe have used the company’s orbs to scan their eyeballs.

Scanning your eye will net you 25 Worldcoin, or ~$41, which you are essentially paying for with your biometric data, a process that raised the ire of Kenyan lawmakers over concerns about “authenticity and legality” of such activities, especially in the realm of data protection and the proliferation of financial services.

Kenyan authorities first caught wind of Worldcoin when Kenyans began flocking in droves to the company’s orb stations to trade biometric information for cryptocurrency. The committee also says that Worldcoin may have scanned the eyes of minors as there were no age verification mechanisms in place.

On Monday, TechCrunch reported that the parliamentary committee called on Kenya’s Communication Authority, its ICT regulator, to disable Worldcoin’s presence in the country, including its physical locations and “blacklisting the IP addresses of related websites.”

The report from the committee is also targeting Tools for Humanity Corp, the company building Worldcoin, and its Kenyan partners for a full-on criminal investigation. Multiple agencies in Kenya are reportedly taking part in the investigation of Worldcoin’s operations with a particular focus on the idea of using financial compensation (which is debatable as Worldcoin is an alt-coin with little actual value) to get biometric data from Kenyans.

Worldcoin is priced at $1.65 per token according to Coin Market Cap. The firm launched with the goal of establishing what it called a new “human identity and financial network” through scanning eyes in the orbs and its own cryptocurrency. Kenya was one of the first nations it launched sign-ups.

According to Reuters, Worldcoin has said that it has not seen any official communications from the Kenyan parliamentary committee. The report will be tabled at the National Assembly for consideration and adoption at a later date.

Cryptocurrencies are yet to be regulated in Kenya and are not considered securities by the Central Bank of Kenya (CBK). In 2015 the CBK issued a warning to Kenyans that virtual tokens are highly volatile, according to a Bowmans report [PDF].

[Image – @PhillipOgola on Twitter]

Luis Monzon

Luis Monzon

Journalist. Covering education, AAA gaming and consumer tech. Reach me at Luis@htxt.co.za.

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