Worldcoin -TheOrb Image Credits: Worldcoin

Worldcoin’s Blockchain Project Faces Scrutiny in Kenya

By John Walubengo

Two weeks ago, Kenya’s parliamentary ad hoc Committee on the conduct of the Worldcoin project concluded its investigations and published its report

Since it is quite a bulky report, running into over one hundred pages, chances are high that not very many Kenyans have bothered to read it.

But no worries, that is where this blog comes in. We intend to summarise the key issues, findings and recommendations in less than seven hundred words.

Just a quick overview of what the Worldcoin project is – for those of us who were too busy and may have missed the headlines. 

Worldcoin is a blockchain-based project co-created by one Sam Altman, the man behind the revolutionary AI project called ChatGPT.

His motivation for building Worldcoin is to create a system that generates digital identities on a global scale (World ID) to eventually use to -distribute global wealth (WorldCoin) to vulnerable groups.

Very noble ideals and the project was moving on well in Kenya and other parts of the world – until it got too successful in Kenya. 

The long queues of Kenyans lining up to register and get the World ID after being scanned by the Worldcoin futuristic-looking gadget called the Orb attracted the Ministry of Interior’s attention.

The Cabinet Secretary for Interior shut down their operations confiscated the Orbs and launched an investigation as to what the project was all about and if it was a threat to national security.

The Issues

Parliament took the cue and launched its own broader enquiry into Worldcoin operations, wishing to know a varied range of issues including but not limited to the following:

  • Was Worldcoin validly authorised to operate in the country?
  • What personal data is Worldcoin collecting from Kenyans and where does it keep it?
  • Is Worldcoin paying Kenyans 50 USD to be registered with a Worldcoin ID?
  • Does the Central Bank of Kenya have visibility of the 50 USD payments, given that they were originally issued in Cryptocurrency before being converted into Kenya Shillings? 
  • Whether the iris scanning machine, the so-called Orb, was safe from a medical perspective.

The Parliamentary committee issued a summons and held meetings with top government officials including Cabinet Secretaries, and CEOs of concerned agencies such as the Data Commission, the Communication Authority, and the Central Bank amongst others.

Further, Worldcoin international and local officials were also summoned and grilled over their operations and at the end of the enquiries, some issues were concluded, while others remained open and recommendations made.

Key findings and recommendations

In a nutshell, the parliamentary ad hoc committee found fault in both the Worldcoin Officials as well as all government agencies concerned including the Minister of ICT, the Data Commissioner, and the CBK, amongst others.

Whereas one can appreciate the effort the parliamentary committee had put in to arrive at some of its findings, one can also observe some errors and how they arose. For example, there is a common misconception that the Data Commissioner authorizes companies to operate in Kenya.

The reality is that company registrations are done by the Business Registration Service as per the Companies Act(rev 2015). The Data Commissioner office does not issue company registration certificates, it issues ‘Data Controller’ and ‘Data Processor’ registration certificates – based on preliminary checks around the companies’ data-related activities.

Of course, the Data Commissioner has powers to issue cease and desist orders for rogue data controllers or data processors; but such orders would be limited to personal data processing, rather than explicitly shutting down the whole business entity.

Either way, one positive finding and recommendation was that Kenya, through CBK, lacks an oversight framework for managing cryptocurrencies or virtual assets and virtual assets providers. 

Worldcoin had promotions that awarded uses 50USD worth of Cryptocurrencies making their numbers surge. The committee was unable to determine the legality or otherwise of such a promotion since there are no state legislations or guidelines on cryptocurrencies.

The Minister of ICT was therefore given 6mnths to come up with proposed legislation to cater for blockchain and its related variants such as cryptocurrencies in order to provide guidelines on how to deal with emerging technologies.

John Walubengo is an ICT Lecturer and Consultant. @jwalu.


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