South Korea Imposes $850K Penalty on Worldcoin
Worldcoin Foundation and Tools for Humanity have been fined by South Korean authorities for illegal collection and transfer of biometric data.
South Korea’s Personal Information Protection Commission announced on September 26 that it fined Worldcoin and its partner Tools for Humanity 1.1 billion Korean won ($850,000). This action came after an investigation revealed unauthorized collection of biometric data from nearly 30,000 Korean users.
Illicit Data Collection and Transfer
The investigation began after complaints and media reports suggested that Worldcoin collected biometric data in exchange for cryptocurrency without proper consent. The foundation’s actions violated local laws by collecting iris data without adequate user consent and transferring the data abroad without informing users.
Worldcoin argued that the iris data was used solely to prevent duplicate registrations and was anonymous. However, the commission rejected this, stating that iris data is inherently unique and linked to individuals.
Global Regulatory Scrutiny
Worldcoin’s iris scanning practices have attracted regulatory attention globally, including from India, Hong Kong, and Germany. Despite the scrutiny, Worldcoin continues to expand, launching orb verifications in Guatemala, Malaysia, and Poland on September 25.
Malaysia’s government has even embraced this technology, signing an agreement with Worldcoin to integrate it into the country’s digital infrastructure.
Hong Kong Crypto Trading Clerk Disappears with $500K
A clerk at a Hong Kong cryptocurrency trading store allegedly stole 4 million Hong Kong dollars (around $500,000) from a customer. The incident occurred on September 23 at a store in Sham Shui Po district.
The Incident
A 43-year-old man brought cash to a cryptocurrency trading store. After handing the cash to a female clerk, she went into a room and did not return, leaving the man locked inside the shop. Police arrested two men linked to the theft, who, along with the clerk, were involved in setting up the store to steal from customers.
The victim had previously made two successful transactions, which built his trust in the shop and led him to increase his investment. This incident is part of a series of 12 similar cases this year in Hong Kong, resulting in a combined loss of 10.8 million Hong Kong dollars ($1.4 million).
Japan Bans DMM Bitcoin from Reopening
Japanese authorities have barred cryptocurrency exchange DMM Bitcoin from resuming operations until it improves its risk management systems. This decision follows a major security breach that led to the theft of 4,502.9 BTC ($305 million).
Security Breach and Regulatory Action
The Kanto Local Finance Bureau issued a business improvement order on September 26, demanding DMM Bitcoin strengthen its system risk management, implement measures to prevent future breaches, and clarify management responsibilities. The exchange must submit an improvement plan by October 28 and cannot resume suspended services until it complies.
The investigation found that DMM Bitcoin operated without a system risk manager, leading to poor management of private keys and inadequate staff oversight. These lapses allowed hackers to exploit vulnerabilities and siphon off customer funds.
North Korean Involvement
The May 31 breach is believed to be the work of the North Korean hacking group Lazarus, responsible for other attacks on Asian exchanges like WazirX and Indodax. Recently, Singapore-based BingX also suffered an attack, with the perpetrators yet to be identified.
User Concerns Over Terraform Labs Closure
Users of the Terra blockchain are worried about losing their tokens if Terraform Labs shuts down its services. The company announced on September 25 that it might close its products and services by October 30 unless external parties intervene.
Potential Shutdown
Terraform Labs, responsible for the UST stablecoin, which lost its peg in May 2022 causing a significant market crash, has been preparing to cease operations following a $4.47 billion settlement with the SEC. Users are concerned that the closure will affect their ability to self-custody and stake Luna tokens.
The company is in discussions with third parties to sell some of its products and services. If these efforts fail, key products, including the Station Wallet, will be discontinued, giving users until the end of October to wind down their activities.
