Worldcoin (WLD), the crypto project launched by OpenAI’s Sam Altman, is currently under investigation by the French data protection regulator CNIL for “questionable” practices. “The legality of this [data] collection seems questionable, as do the conditions for the preservation of biometric data,” a CNIL spokesperson stated, referring to Worldcoin’s practice of scanning retinas to ensure that no single person can claim crypto rewards twice.

CNIL has initiated investigations, supporting the work of Bavarian privacy regulators who have primary responsibility under EU law. The outcome of these investigations could have significant implications for Worldcoin and similar projects that rely on biometric data.

Worldcoin’s Response and Future Implications

In response to the investigation, the Worldcoin Foundation stated, “The project will continue to cooperate with governing bodies on requests for more information about its privacy and data protection practices. We are committed to working with our partners across Europe to ensure that the Worldcoin project meets regulatory requirements and provides a safe, secure, and transparent service for verified humans.”

The project reiterated that it complies with the EU’s law on biometric data collection and transfer, the General Data Protection Regulation (GDPR), and continues to assess local regulations to ensure compliance. The outcome of these investigations and Worldcoin’s response could set a precedent for future crypto projects that utilize biometric data.

The Impact on Worldcoin’s Market Performance

Despite the ongoing investigation, Worldcoin’s token, WLD, has shown resilience in the market. At the time of writing, WLD tokens were trading up 1.5% over 24 hours at $2.19. However, the investigation’s results could significantly impact Worldcoin’s future market performance and overall acceptance in the crypto community.

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Introduction to the Lawsuit

Crypto exchange Coinbase has been hit with a lawsuit filed in a District Court in California on May 1st, claiming violation of Illinois’ Biometric Information Privacy Act (BIPA). The suit alleges that the exchange improperly collected, stored, and distributed customers’ biometric data, including fingerprint and facial recognition information.

Plaintiff Michael Massel is seeking relief in the form of $5,000 in damages for each “intentional and reckless violation” of BIPA and an additional $1,000 for every violation discovered by Massel’s legal representation.

Accusations and BIPA Regulations

The lawsuit accuses Coinbase of collecting biometric information through its Know Your Customer (KYC) procedures, which involves illegally obtaining, using, storing, and disseminating the data. BIPA regulations mandate that a company collecting biometric data must inform a person in writing that it obtains such data and specify the purpose and duration of the data’s storage. Furthermore, BIPA requires written consent from a customer, and the company must publish “publicly‐available written retention schedules and guidelines for permanently destroying biometric identifiers and biometric information.”

Massel’s legal team contends that Coinbase does not comply with these regulations when collecting customers’ data before and after creating new accounts. They argue that Coinbase’s “collection, obtainment, storage, and use” of customers’ biometric data is “unlawful” and exposes clients to “serious and irreversible privacy risks.”

Potential Consequences and Data Destruction

The legal document states that if Coinbase’s database containing facial geometry scans or other sensitive biometric data is hacked, breached, or otherwise exposed, Coinbase users have no means to prevent identity theft. Furthermore, the lawsuit claims that the exchange should have “permanently destroyed” such data after a customer created a Coinbase account since the information was obtained solely for account creation purposes.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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