Worldcoin Collapsing? Two Nations Ban Biometric Crypto Project

The Sam Altman-backed cryptocurrency venture Worldcoin is facing stern legal issues on more than one front. A Kenyan court has ruled that the firm’s business is not legal, a day after Indonesian officials suspended its activities. The one-two regulatory blows have caused Worldcoin’s token value to plummet by more than 5% over the past 24 hours.Kenyan Court: Worldcoin Violated Data Protection ActJustice Aburili Roselyne of the Kenyan High Court made three orders against Worldcoin Foundation on May 5, 2025. The court held that the firm violated Kenya’s Data Protection Act of 2019 when it harvested iris and facial biometric information from citizens. Worldcoin is now ordered to erase all data within seven days.The ground had been giving Kenyans about 7,000 Kenyan shillings in cryptocurrency for their biometric information. This was picked up by the Katiba Institute, a Nairobi-based civil society, which lodged the court case.The consent was not legal since it was elicited through monetary incentives with Worldcoin’s cryptocurrency, said the court in its decision. The Data Protection Commissioner will monitor the process of erasure to confirm compliance.World coin Data Breach:Court orders World coin to delete data collected in KenyaCourt says data was collected unlawfullyData commissioner will supervise the deletion of data #CitizenBriefs @jimkario pic.twitter.com/e4TLMumqOY— Citizen TV Kenya (@citizentvkenya) May 5, 2025Indonesian Authorities Suspend OperationsIndonesia’s Ministry of Communications and Digital (Komdigi) suspended Worldcoin’s registration in a further setback to the cryptocurrency venture. As per officials, the firm had been running business through unauthorized legal entities.It was discovered that PT Terang Bulan Abadi, an entity associated with Worldcoin, had been carrying on business in the absence of a valid Electronic System Operator Certificate. Another Indonesian partner, PT Sandina Abadi Nusantara, had allegedly practiced legal misrepresentation.Noncompliance with registration requirements and identity theft of another legal entity is a grave offense, Komdigi declared in its announcement.Market Reacts With Price DeclineThe WLD token value declined to $0.88 after it reached a 24-hour peak of $0.96, as reported by market data. The open interest in Worldcoin also decreased by over 5%, to $219 million.These numbers indicate investors are increasingly worried about the regulatory woes of the project. The timing is especially inopportune for Worldcoin, which had just made what some analysts termed a “bullish move” by launching WLD ID in the United States. Coinbase was also set to list the token.Government Actions Follow Public ConcernsBoth the government moves seem to be reactions to public outcry over Worldcoin’s practice of data collection. In Kenya, the government had earlier suspended the registration exercise after long queues showed up at public venues, creating security and privacy concerns.In Indonesia, Alexander Sabar, director general for digital oversight, appealed to citizens to report unregistered digital service providers. They invite the public to help maintain a safe and trusted digital space for all citizens, he said.The Worldcoin Foundation employs devices known as “Orbs” to scan individuals’ irises in return for cryptocurrency. Though the company frames this as a method for establishing digital identities, it has drawn privacy concerns and questions regarding consent as well as the safety of the biometric information being gathered.Featured image from Santa Clara University, chart from TradingView