The provincial government of Buenos Aires has recently accused Worldcoin of violating consumer laws through what they describe as “abusive clauses” in their user agreement. The government claims that Worldcoin’s agreement allows them to interrupt services without providing any repair or reimbursement to the users. Moreover, they argue that Worldcoin forces users to waive their rights to collective complaints and instead subjects them to Cayman Island laws. Disputes are allegedly required to be resolved through arbitration in California, which the government believes goes against Argentina’s Civil and Commercial Code.
The government of Buenos Aires conducted audits on Worldcoin and identified two primary concerns. Firstly, Worldcoin lacks an age disclaimer warning users that individuals under the age of 18 are prohibited from using the service. Additionally, Worldcoin stores private data of Argentine users internationally in Brazil. This raises issues about the use, protection, and storage of biometric data collected from the faces and eyes of Argentine users. The government especially questions the ability of Worldcoin to delete biometric data as required.
Potential Penalties and Legal Actions
If the charges against Worldcoin are proven, the company could face a fine of up to 1 billion Argentine pesos, equivalent to $1.2 million. As of now, Worldcoin is only exposed to the possibility of this fine. The accusations against Worldcoin by Buenos Aires are not isolated incidents, as similar actions have been taken in the EU, specifically by Spain and Portugal. These allegations in both regions focus on data collection from minors, user consent, and data ownership. Spain and Portugal have even gone as far as imposing three-month data collection bans on Worldcoin.
In response to the allegations, Worldcoin has declared its operations to be fully legal, stating this publicly in March. The company has also implemented transparency improvements that have garnered praise from important figures such as Ethereum creator Vitalik Buterin. Worldcoin, founded by Sam Altman, who is also the CEO of OpenAI, has emphasized its commitment to compliance with regulations and improving transparency in its operations. Additionally, Altman serves as the chairperson of Tools for Humanity, a firm that is involved in software and hardware development in support of Worldcoin.
Overall, the accusations made by the provincial government of Buenos Aires against Worldcoin highlight significant concerns regarding consumer rights, data protection, and legal compliance. The actions taken by other jurisdictions in the EU further underscore the gravity of the situation. Worldcoin’s response and efforts to address these issues will be crucial in determining its standing and reputation in the cryptocurrency market.