Worldcoin pivots away from Europe amid tangle of GDPR problems

One thing about the EU’s General Data Protection Regulation (GDPR): it is designed to protect citizens’ sensitive personal data. This principle is apparently incompatible with the activities of Worldcoin, which has announced a pivot away from Europe and toward Asia, according to comments made at the recent Sifted Summit.Fabian Bodensteiner, managing director of Worldcoin Europe, says his territory is not a large focus because other markets are more promising. “We just see a larger dynamic in other regions of the world and because we’re not 1000 employees we need to prioritize where we see the biggest business opportunities.”Yet the biometrics, identity and crypto company has struggled to win over regulators in EU countries. Data watchdogs in Portugal, France and Germany have questioned whether Worldcoin’s activities comply with the GDPR, and the Spanish regulator AEPD imposed a temporary ban on the firm’s collection of iris biometrics via spherical capture devices called Orbs. Regulatory pressure may not be Worldcoin’s stated reason for stepping away from Europe, but it certainly makes it a harder market to penetrate.Decisions on GDPR compliance could have logistical impacts on Worldcoin, as well: parent company Tools For Humanity has EU headquarters in the German city of Erlangen. But if Bavaria’s data protection authority (BayLDA) finds the company to be in violation of the GDPR, it could mean it will need a new home in which to stage operations. (Regardless, it will not be homeless, also having headquarters in San Francisco.)While the firm’s focus is now on APAC and Latin American nations, Sift is not willing to let go of Europe altogether. “We want to make it work here, we don’t just want to leave Europe and dodge things,” he says. “We want to stay in the conversation and we want to stay committed to the market.” Dodging things, however – namely data protection regulations – appears to be a key part of Worldcoin’s current game.Despite this, the company continues to insist that its biometric collection practices prioritize privacy. Its privacy chief, Damien Kieran, recently told Business Insider that “for World ID, privacy is the product.” The firm’s recent privacy white paper lists four key principles: Security (“Secured by math”), Anonymity (“Move freely online”), Transparency (“Built in the open”), and Choice & Control (“Your data, your rules”.)“These ideas inform all aspects of the Worldcoin project, from the hardware used to verify humanness and uniqueness to the cryptographic technologies used to ensure community members remain unidentifiable,” says a blog outlining its privacy commitments. The piece also includes a series of explainer videos on “Privacy in the age of AI,” featuring topics such as zero-knowledge proofs, secure multi-party computation and Face Auth. As an alternative, it also offers a podcast on the issue.Privado ID exec takes long view on biometric indicatorsOn their own Cointelegraph podcast, The Agenda, Ray Salmond and Jonathan DeYoung expresses what many have likely thought about the Worldcoin project on first impression: “the idea of scanning one’s eyeball into a metal orb to be stored in a database that verifies one’s identity, and receiving digital money in return, seemed like the plot of a science fiction film not too long ago.”“Is there a way to comply with these local regulations while still preserving user privacy?” the hosts ask. For answers, they speak with Sebastian Rodriguez, chief product officer at Spanish open source verification provider Privado ID. Privado is a competitor of Worldcoin, among a few that have popped up to serve similar purposes in providing digital identity. It performs both proof of humanity and age checks with a 3D biometric face scan, promising “Proof of Uniqueness.”Rodriguez covers verifiers, wallets, data minimization options, standards, the role of the blockchain, and the privacy risks of biometric technology. On the latter, he says “the risks are huge. I don’t think we have understood the risks yet because biometrics markers or biometric base identifiers have a number of properties different from any other type of identification that we have used in the past.”Long-lasting reputation that is attached to your biometrics, he says, “shows you that in the wrong hands, it could be a ban forever. It could be a mark forever in your life. You cannot detach yourself from that identifier. Every trace that you leave now is going to be there for the rest of your life. Every trust assumption that we make now will come back to us 10, 20 years later.Data privacy regulations, he says, must take the permanence of biometric markers into account. Left to their own devices, business will collect as much data as possible in principle. “In my opinion, the principle of trustless design is even more important in identity than the decentralized mantra. Things can be centralized but still can be trustless. We need to review all the trust assumptions that we have in every piece of the design.”Worldcoin deployment in Puebla follows familiar narrativeIf the story of Worldcoin so far is nominally a success story – the company has accrued 7 million “verified human” users since its launch in 2019 – it is also a cat-and-mouse game. The pattern is to set up shop in a new location, collect as many iris biometrics as possible, and wait for the inevitable intervention from regulators.Mexico is the setting for the latest installment. Diario de puebla reports that World ID verification services are now available in the state of Puebla. “With this, those over 18 years of age will be able to prove that they are unique human beings online and obtain a digital identity that respects privacy by obtaining a World ID.”According to general director of communication for Tools For Humanity in Latin America, Javier Tuiran, “Worldcoin does not pretend to know who you are; it simply recognizes you as a unique human being, a distinction that is increasingly important with the advancement of AI. The Worldcoin community aims to create the tools humanity needs to prepare for the AI ​​era by designing the largest privacy-preserving financial and digital identity network to provide digital inclusion to all human beings, including the more than 4 billion people who currently lack digital identity and have limited access to global economies.”Cue the alarm bells, in this case from the National Autonomous University of Mexico (UNAM). Carlos Tlahuel, coordinator of information security at UNAM’s General Directorate of Computing and Information and Communication Technologies (DGTIC), notes in an article from September that “biometric data obviously needs special treatment,” and that Worldcoin has not reported why it requires it. “This lack of transparency generates speculation and some countries do not look favorably on the project.”Uno TV quotes Natalia Zuazo, director of digital consulting firm Salto Agencia, who has a blunt assessment of Worldcoin’s strategy of trading WLD tokens for iris biojmetrics. “If you look at the map, they obviously go to countries in crisis, to the poorest countries, because people are more predisposed to make these exchanges,” she says.Value of WLD tumbles as Altman, Blania gear up for ‘new world’ live eventWorldcoin is surely aware of these criticisms, but it has fashioned itself as a kind of friendly bulldozer, forging ahead and trying its best not to steer into areas that present challenges.On October 17 it is hosting a live event in San Francisco entitled “A new world.” Per a blog post, “project co-inventors Alex Blania, CEO of Tools for Humanity, and Sam Altman, CEO of OpenAI, will be joined by key members of the Worldcoin Foundation and TFH to discuss meaningful updates to the project.”“The ‘new world’ event is not intended to generate hype,” says the post. “Instead, this is an opportunity to clearly explain the next steps that Worldcoin, along with its contributors, are taking to achieve its mission.” (One likely step is new branding, if the aesthetic of the announcement is an indication.)The firm says it wants to scale “to 700 million and beyond, providing important tools that will help everyone share in the benefits of the AI-driven Intelligence Age.” But the ultimate decider of its fate will be the bottom line. According to Cointribune, the beginning of October saw WLD tokens lose 25 percent of its value over seven days. “The technical indicators are hardly more optimistic. The WLD crypto has now fallen below its 50-day moving average, confirming that the short-term trend is decidedly bearish.”Data collection is one thing. But in the end, the business principle that matters most is “be profitable.”