The cryptocurrency initiative Worldcoin, backed by Sam Altman, is facing serious legal challenges. A Kenyan court has declared its operations illegal, just as Indonesian authorities have paused its activities. These regulatory setbacks have led to a drop in Worldcoin’s token value by over 5% in the last day.
Kenyan Court Rules on Data Protection Violations
On May 5, 2025, Justice Aburili Roselyne from the Kenyan High Court made a ruling against the Worldcoin Foundation. The court found the firm in violation of Kenya’s 2019 Data Protection Act for collecting iris and facial biometric data from citizens. Worldcoin must now delete all data within a week.
Individuals were previously receiving around 7,000 Kenyan shillings in cryptocurrency for their biometric details, prompting a civil rights organization in Nairobi to file the case.
The court determined that consent was not valid, as it was obtained through financial incentives involving Worldcoin’s cryptocurrency. The Data Protection Commissioner is tasked with overseeing the deletion process to ensure compliance.
Worldcoin Data Breach:
Court mandates Worldcoin to erase data gathered in Kenya
Data was collected unlawfully, according to the court
Data commissioner will oversee deletion processes #CitizenBriefs @jimkario pic.twitter.com/e4TLMumqOY
— Citizen TV Kenya (@citizentvkenya) May 5, 2025
Indonesian Government Halts Worldcoin Operations
In a further setback, Indonesia’s Ministry of Communications and Digital (Komdigi) suspended Worldcoin’s operations. Officials stated the company was operating with unauthorized legal entities.
It was identified that PT Terang Bulan Abadi, linked to Worldcoin, had been functioning without a proper Electronic System Operator Certificate. Likewise, PT Sandina Abadi Nusantara, another associate, reportedly misrepresented its legal status.
Komdigi emphasized that failing to comply with registration norms and committing identity theft are serious infractions.
Market Reaction to Price Drop
The value of the WLD token fell to $0.88 after hitting a peak of $0.96 within 24 hours, according to market data. Additionally, interest in Worldcoin decreased by over 5% to $219 million.
These developments are causing investors to grow increasingly concerned about the project’s future, particularly since Worldcoin had recently launched WLD ID in the U.S. and was looking to list the token on Coinbase.
Government Actions in Response to Public Backlash
The actions taken by the governments are largely reactions to public concerns regarding Worldcoin’s data collection practices. In Kenya, there was a pause on registrations due to large crowds at venues, raising alarm over security and privacy.
In Indonesia, Alexander Sabar, the director general for digital oversight, urged citizens to report unregistered digital service providers, encouraging public involvement in maintaining a secure digital environment.
Worldcoin utilizes devices known as “Orbs” for iris scans in exchange for cryptocurrency, a practice that has sparked privacy issues and debates around consent and the safety of collected biometric data.
Featured image from Santa Clara University, chart from TradingView
