By Martina Jaureguy and Facundo Iglesia

The Buenos Aires province government has accused U.S. iris-scanning company Worldcoin of including “abusive clauses” in its contracts and violating consumer rights. The firm, which recruits volunteers by offering a cryptocurrency token called WLC in exchange for their biometric data, could be fined AR$1 billion (US$1.1 million at the official rate, US$969,339 at the MEP rate).

The complaint was brought forward by the provincial production, science, and technological innovation ministry. The company is being accused of abusing consumer protection laws and issues regarding private data protection, including those of minors, among other things. So far, the judiciary has not been involved.

Worldcoin is an iris biometric cryptocurrency project created in 2019 by OpenAI CEO Sam Altman that compiles people’s biometric information through iris scanning. It claims this data can then be used to verify that a user is human and not a bot, an issue it posits will become pressing in the age of artificial intelligence (AI). On its website, Worldcoin states that it is striving to become “the world’s largest privacy-preserving human identity and financial network.”  

The company collects data through special cameras called orbs that scan the irises of people who volunteer in order to create their unique digital identity (World ID). In return, people receive cryptocurrency tokens, which they can only access via their Worldcoin app and trade for money. The firm claims to be an open source protocol and that World ID would function as a “human passport for the internet” that could be used, for example, for personal identification on apps.

Almost 5 million people have registered on World ID in 120 countries since its launch in 2019, according to the company’s website. The currency has not been formally launched in the United States. Some countries, including Kenya and Spain, have banned it because of concerns regarding privacy issues.

The BA province accusation was made following an investigation by its consumer protection division. The company was notified last week and was given five days to present evidence to disprove the allegation. The government could fine the firm if it considers it guilty.

According to audits carried out by the government, Worldcoin does not have signs indicating volunteers must be over 18 years old. A government communiqué released last Thursday said that this could mean that they are scanning minors.

The authorities also found that company information regarding the use and storage of Argentine users’ biometric data was contradictory. This information may be stored in Brazil, the press release said.

The alleged “abusive clauses” in the contracts include allowing the company to halt their services without providing any kind of compensation or reimbursement. It also forbids users from participating in class actions against the firm and uses Cayman Islands law to regulate their services in Argentina. 

In addition, the contracts say that any potential litigation will be resolved in California. Trying local cases in foreign courts is against Argentine law.

Asked by the Herald, Worldcoin said the company “complies with the highest personal data processing standards in the world.”

“Worldcoin has answered all of Buenos Aires province’s questions in time and form, exhaustively, since January of this year with the aim of being transparent regarding its practices,” the company said. They added that the accusation revolves around “‘alleged’ infractions” that have not been confirmed.

However, the company clarified that they will now be controlling the age of the volunteers at all iris scanning posts to prevent minors from participating. They will allow volunteers to cancel their World ID verification, giving them the option to permanently erase their iris code. Until now, all biometric data was automatically erased if the user decided to opt out, but not the iris code.