Singapore Authorities Probe Worldcoin Over Money Laundering and Terrorism Financing Concerns

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The controversial crypto project Worldcoin is now scrutinized in Singapore for its potential role in money laundering and terrorism financing.

Singapore authorities are probing some illegal sales of Worldcoin accounts and tokens. The country’s financial regulator expressed concerns over potential data misuse and criminal activity that could arise from the illegally obtained accounts.

Biometric Data at Risk: Unauthorized Worldcoin Transactions Raise Red Flags

Gan Kim Yong, Singapore’s Deputy Prime Minister and Chairman of the Monetary Authority of Singapore (MAS), disclosed the ongoing investigation in a recent statement.

Yong said the investigation focuses on individuals allegedly involved in unauthorized third-party sales and purchases of Worldcoin accounts and tokens. Their activities have raised concerns about such illegally obtained accounts’ potential legal and security implications.

During a parliamentary session, Yong informed the assembly that the police were investigating seven individuals. These individuals had reportedly provided Worldcoin-related services without proper licenses.

This lack of authorization breaches the Payment Services Act 2019, which regulates payment systems and digital payment token services in Singapore.

According to information provided to MAS, the Worldcoin project does not currently fall under the payment services category defined by the Payment Services Act.

However, MAS clarified that individuals or businesses buying or selling Worldcoin accounts and tokens may be payment service providers. In such cases, they are subject to the requirements of the PS Act, which includes the need to be licensed.

Gan Kim Yong further explained that criminals could exploit Worldcoin accounts and tokens when individuals trade them illegally. These unauthorized transactions could serve as a channel for illicit activities like money laundering and the financing of terrorism.

By operating without proper oversight, these transactions bypass legal safeguards that are in place to detect and prevent financial crimes. Notably, the Payment Services Act aims to curb such risks by ensuring that only licensed entities can offer payment services.

On August 7, Singapore’s police issued a public advisory warning citizens against giving away or selling their Worldcoin accounts. 

During a parliamentary meeting, Gan Kim Yong Highlighted the risks of such actions, warning that third parties could misuse these accounts for illegal purposes.

He cautioned consumers to be wary of offers encouraging them to transfer access to their digital payment token wallets or World IDs.

Yong further emphasized the importance of organizations handling sensitive personal data, such as biometric information, and adhering to Singapore’s strict data protection regulations.

Global Pushback Against Worldcoin’s Expansion from Singapore to Spain

Worldcoin’s Iris biometric collection system has attracted significant global attention, mostly from major regulatory bodies concerned about privacy and security.

This system, designed to verify a user’s identity by scanning their iris, has become a point of scrutiny. The concerns focus on how organizations collect, store, and potentially use such sensitive biometric data.

In 2023, regulatory authorities in several countries, including India, South Korea, Kenya, Germany, and Brazil, took decisive action. They halted the collection of iris data and launched an investigation into Worldcoin’s practices.

In addition, European authorities expressed concern that Worldcoin’s biometric data collection practices could violate the General Data Protection Regulation (GDPR), which sets stringent rules for handling personal data within the European Union.

On March 18, Spain became the first European country to take decisive action by banning Worldcoin’s biometric data collection.

Despite these regulatory hurdles, Worldcoin has continued its aggressive expansion strategy. The company has continued promoting its platform and actively enrolling new users worldwide. By April 16, Worldcoin had successfully attracted more than 10 million users globally.