Why is Worldcoin Facing Regulatory Scrutiny Across Multiple Countries, and What Does the Future Hold for WLD?

Multiple countries, including the UK, France, and Germany, investigating Worldcoin

According to the German business daily Handelsblatt, Germany's financial regulatory authority, Bafin, has launched an investigation into Worldcoin, a cryptocurrency project created by Sam Altman, the former CEO of OpenAI.

Germany is not the first country to target Worldcoin. Prior to this, regulatory bodies in France, the United Kingdom, Kenya, and other countries have already initiated investigations. The president of Germany's data regulatory agency even mentioned that they had started investigating the Worldcoin project by the end of 2022.

Why is Worldcoin being investigated? 

Before understanding the reasons for the scrutiny, let's take a look at what Worldcoin is. Worldcoin is a decentralized identity (DID) project aiming to establish a digital identity network to serve the development of artificial intelligence, with WLD being the governance token of Worldcoin.

Worldcoin is facing scrutiny not because of its financial attributes but due to privacy concerns. The French privacy regulator highlighted that there appear to be issues with the legality of Worldcoin's collection and storage of biometric data.

In addition, Kenya has been an important market for Worldcoin, with many people actively participating in verification activities to earn rewards in WLD. The Kenyan government halted Worldcoin's data collection efforts, and their police raided Worldcoin's warehouse, seizing iris scanning machines used for data collection. These machines were taken to the Criminal Investigation Department for analysis to safeguard data security.

While Worldcoin's vision seems promising, with WorldID aiding users in online verification, the collection of sensitive information if not protected or used appropriately could lead to data breaches, unauthorized use, or illegal activities such as data trading.

What is the future fate of WLD?

On July 24, 2023, WLD coin traded for the first time at $0.15 and surged to $3.32, a staggering 2,100% increase. Since then, WLD has retraced and fluctuated between $1.8 and $2.5, currently priced at $1.9.

WLD Price Chart, Source: TradingView.

From a fundamental perspective, as one of the DID projects, WLD appears to be more like a utopian narrative rather than directly addressing people's everyday needs. Additionally, its core business challenges people's privacy and security, making it susceptible to government opposition.

From a technical standpoint, WLD has a total supply of 10 billion coins, with only 1% currently in circulation (1 billion coins). This tightly controlled supply has helped maintain its price, and there is a possibility of a pullback to previous highs.

However, as circulation increases in the future and potential regulatory crackdowns continue, WLD may face a lack of demand, potentially leading to a drop back to its opening price of $0.15. Therefore, if you are considering investing in this new coin, it's best to make swift decisions and not solely rely on grand visions or ambitious goals. Otherwise, the depreciation of your assets may exceed expectations.