Worldcoin Faces Legal Scrutiny in South Korea
Worldcoin and Tools for Humanity Penalized
South Korean authorities have imposed a hefty penalty on Worldcoin Foundation and its partner, Tools for Humanity, for the unauthorized collection and transfer of biometric data. The Personal Information Protection Commission levied a fine of 1.1 billion Korean won ($850,000) following an investigation into the matter. This probe was initiated after numerous complaints and media reports suggested that Worldcoin was collecting biometric data in exchange for cryptocurrency without acquiring proper consent from users.
Violations of Local Privacy Laws
The investigation revealed that Worldcoin and Tools for Humanity collected iris data from nearly 30,000 Korean individuals without proper legal consent. Furthermore, this biometric data was transferred abroad without notifying users about the recipient’s details or the purpose of the transfer. Worldcoin also failed to provide essential information about data retention and usage. The consent form was initially only available in English, limiting understanding among Korean users until a Korean version was released in March.
Worldcoin’s Defense and Global Scrutiny
Worldcoin argued that the iris data was used solely to prevent duplicate registrations and could not be used to identify individuals. However, the South Korean commission dismissed this claim, asserting that iris data is inherently unique and directly linked to individuals. The iris scanning practice has also attracted regulatory attention in other countries, including India, Hong Kong, and Germany. Despite this, Worldcoin continues to expand its operations, launching orb verifications in Guatemala, Malaysia, and Poland. The Malaysian government has even signed a memorandum of understanding to integrate Worldcoin’s technology into its digital infrastructure.
Crypto Scams Rise in Hong Kong
Bold Theft at Crypto Trading Store
In Hong Kong, a cryptocurrency trading store clerk made off with half a million dollars in cash. The incident occurred in the Sham Shui Po district when a 43-year-old man brought cash to a physical crypto trading store. After handing over the money to a female store clerk, the victim found himself locked inside the shop as the clerk vanished with the cash. Subsequently, police arrested two men linked to the theft. The suspects allegedly set up the store with the intent of stealing cash during transactions.
Increase in Crypto-Related Scams
This incident is part of a broader trend of rising crypto-related scams in Hong Kong. There have been 12 similar cases this year, resulting in a combined loss of 10.8 million Hong Kong dollars ($1.4 million). Victims were lured into these scams by previous successful transactions, which built their trust in the fraudulent operations.
Japanese Authorities Crack Down on DMM Bitcoin
Business Improvement Order Issued
Japanese regulators have issued a business improvement order against cryptocurrency exchange DMM Bitcoin. The order comes after a significant security breach that led to the theft of 4,502.9 BTC ($305 million). The Kanto Local Finance Bureau demanded that the company enhance its risk management systems and prevent future security lapses. DMM Bitcoin must submit a comprehensive improvement plan by October 28 and is prohibited from reopening suspended services until it meets regulatory requirements.
Security Lapses and North Korean Hackers
The investigation found severe lapses in DMM Bitcoin’s risk management, including poor management of private keys and inadequate staff oversight. These vulnerabilities were exploited by hackers, believed to be the North Korean state hacking group Lazarus, who have been linked to other attacks on Asian exchanges like WazirX and Indodax. The hack on DMM Bitcoin is the largest of its kind in 2024, highlighting the need for stringent security measures in the crypto industry.
Terraform Labs Faces User Backlash
Planned Closure Sparks Concerns
Terraform Labs, known for its Terra blockchain, has announced plans to shut down several of its products and services by October 30 unless external parties intervene. This announcement has raised concerns among users who fear losing their tokens if the services are discontinued. Terraform Labs is currently in discussions to sell some of its products and services, but if these efforts fail, key products like the Station Wallet will be discontinued.
Impact of Previous Failures
Terraform Labs has been under scrutiny since the collapse of its UST stablecoin in May 2022, which led to a $40 billion collapse of the Terra-Luna ecosystem. This collapse triggered liquidations and bankruptcies of several cryptocurrency firms, including Three Arrows Capital and FTX. In June, Terraform Labs announced it would cease operations following a $4.47 billion
