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New opportunities in the eyes of investors: How does Worldcoin attract US$250 million in funds?
World Network, originally named Worldcoin, is a for-profit cryptocurrency project developed by Tools for Humanity, a human identification technology company headquartered in San Francisco and Berlin. Since its founding in 2019 by OpenAI CEO Sam Altman, Max Novendstern and Alex Blania, it has successfully attracted Investment of up to US$250 million. This business aims to provide a reliable method of online identity verification called World ID and attempts to earn WLD tokens for new users by performing iris scans using World Coin’s circular iris scanner, however This has triggered privacy concerns in many countries.
"The design concept of World Coin is to combat false identities and counterfeiting problems caused by artificial intelligence."
Project History
The WorldCoin project was launched in 2019 by Tools for Humanity, a company founded by Sam Altman, Max Novenstern and Alex Bragna. In 2021, the company claimed that its token (WLD), which aims to promote a more unified and fair global economy, will not be listed in the United States. The token is an Ethereum-based Layer 2 cryptocurrency that leverages the security of the Ethereum blockchain and has its own economy.
The project initially raised $25 million in 2021, followed by an additional $100 million within six months, bringing the token's value to $3 billion. However, in April 2022, MIT Technology Review, citing community voices, accused Worldcoin of “exploiting students” and “targeting low-income communities,” concluding that “in places with less funding and legal protections , it is cheaper and simpler to run data collection operations."
Growth and expansion of funds
In May 2023, WorldCoin announced that it had received another US$115 million in funding, which will be used for robot testing, research and development, and the expansion of projects and applications. During the testing phase, Worldcoin has reported attracting approximately 2 million users. With the official launch in July 2023, WorldCoin has opened 11 scanning stations in the United States and plans to expand services in 35 cities in 20 countries. Users in London received 25 WLD tokens after scanning their irises. WLD tokens are currently freely traded on multiple cryptocurrency exchanges, although not yet open in the United States.
"Ten percent of WLD tokens are reserved for WorldCoin investors, and the other ten percent are reserved for WorldCoin employees."
Design and operation model
The goal of World Coin is to provide a reliable online identity verification method called World ID to deal with security issues caused by false identities and robots on the Internet. By recruiting new users using its devices designed for iris scanning, they can earn WLD tokens. Users need to provide an email address or phone number and use the World Coin app to obtain WLD.
In order to expand its user base, WorldCoin relies on so-called "operators", which are independent contractors employed by WorldCoin and pay commissions for each signing in the stable currency Tether.
Legal and Regulatory Challenges
The currency has not yet been officially launched in the United States and other countries due to concerns about privacy and potential fraud risks. In July 2023, the French data protection authority (CNIL) and the British Information Commissioner's Office announced an investigation into WorldCoin. Subsequently, regulators in Bavaria and South Korea also announced investigations.
Kenya, as one of the first countries to launch WorldCoin, was forced to suspend registration in August 2023, citing security, privacy and financial concerns. The country’s Data Protection Commission ordered WorldCoin to stop collecting personal data, but WorldCoin did not comply. In the same year, Worldcoin also ceased operations in Brazil and Kenya.
"WorldCoin's iris scanning collection process may violate the provisions of the Personal Data (Privacy) Ordinance."
In January 2024, Hong Kong’s Privacy Commissioner’s Office executed search warrants on six Worldcoin offices, some of which were used to collect iris scan information. The office believes there is a potential risk of misuse of personal data when companies collect and process iris scans. After investigation, World Coin was found to have violated privacy regulations and was ordered by the Spanish Data Protection Agency in March 2024 to stop biometric data collection operations.
With the renaming of World Coin to World Network, this project has gradually attracted wider social attention and discussion. Can such a potential technology project really handle privacy and legal challenges while making huge amounts of money?
