• Buenos Aires accuses Worldcoin of breaking consumer laws by including unfair rules in its user agreement and storing data internationally, which could result in a large fine.

• The government says Worldcoin’s agreement allows it to stop services without fixing or refunding, and it applies laws from the Cayman Islands to people in Argentina, breaking local rules.

The provincial government of Buenos Aires has leveled serious accusations against Worldcoin, a cryptocurrency firm founded by Sam Altman, CEO of OpenAI. These allegations revolve around purported violations of consumer laws, primarily concerning the company’s user agreement and data handling practices.

One core grievance outlined by the Buenos Aires government is the presence of what it terms “abusive clauses” in Worldcoin’s user agreement. These clauses, found in contracts such as “Terms and Conditions of Use,” “Privacy Notice,” and “Data Consent Form,” have raised concerns regarding their conformity with Argentine consumer protection laws.

The government alleges that these clauses allow Worldcoin to interrupt services without providing adequate repair or reimbursement to users. Moreover, it claims that the company mandates surrendering users’ rights to collective complaints and applies laws from the Cayman Islands to Argentine residents, a practice deemed unacceptable.

Furthermore, the government of Buenos Aires has identified contradictions in the treatment of biometric data collected by Worldcoin from citizens of the province. The contracts force users to waive collective claims and subject disputes to arbitration in California, which conflicts with Argentine law. Additionally, the storage of iris data in Brazil and the lack of public announcements prohibiting minors from registering with Worldcoin have raised concerns among authorities. This insistence on outside regulations further complicates matters and raises concerns about the protection of consumer rights within Argentina.

Data Handling Concerns

The provincial government’s audits of Worldcoin have brought to light two significant concerns regarding data handling practices. Firstly, the absence of an age disclaimer notifying users that individuals under 18 cannot access the service raises questions about compliance with age-related regulations. Secondly, the storage of private data about Argentine users internationally, particularly in Brazil, has sparked worries about the protection and sovereignty of sensitive information.

Ariel Aguilar, Undersecretary of Commercial Development and Investment Promotion of the province, expressed difficulty in understanding Worldcoin’s operations due to the complexity of its contracts and lack of information provided. This opacity has fueled concerns among officials regarding the clarity and transparency of Worldcoin’s practices, particularly concerning the handling of sensitive biometric data. This concern underscores broader privacy controversies surrounding the company, with parallels drawn to similar actions taken by authorities in the European Union, specifically Spain and Portugal.

If the allegations against Worldcoin are proven, the company could face a hefty fine of up to 1 billion Argentine pesos ($1.2 million). However, as of now, the firm is only exposed to the possibility of such a penalty. In response to these accusations, Worldcoin has declared its operations as fully legal and announced transparency improvements, which have received recognition from prominent figures such as Ethereum creator Vitalik Buterin.

Unprecedented Growth

This news comes as Worldcoin’s World App, the cornerstone of the cryptocurrency project’s universal basic income initiative, has achieved a significant milestone, surpassing 10 million total users signed up. The growth trajectory has been remarkable, with an average of 2 million users engaging with the platform daily and over 5 million users monthly. 

These achievements come less than a year after the service’s launch in June 2023, signaling an exponential rise in adoption. This quick adoption highlights the World App’s increasing usefulness and popularity. It acts as a portal for users to take advantage of Worldcoin’s universal basic income scheme.