WorldCoin faces a $1.2 million fine for violations in Buenos Aires.

Worldcoin, the digital currency initiative led by Sam Altman, has faced legal challenges amid allegations of consumer rights violations in Buenos Aires.

The Ministry of Production, Science and Technology Innovation of the state of Buenos Aires filed a lawsuit against WorldCoin after discovering fraudulent clauses in user contracts.

Buenos Aires flag issues with Worldcoin data practices

Buenos Aires officials pointed to discrepancies between Worldcoin's reported data-handling practices and the findings of state inspections. Undersecretary Ariel Aguilar expressed concern about the storage and immediate deletion of biometric data, pointing to the lack of transparency surrounding these procedures and the potential violation of user rights.

“The complexity of these agreements, combined with the innovative nature of WorldCoin's operation and lack of clear information, hinders overall understanding of the system,” Aguilar said.

WorldCoin failed to disclose that only individuals over the age of 18 can use its services, which may result in the collection of information from minors, according to an investigation. Moreover, Worldcoin's biometric data collected from Argentinian users appears to be stored in Brazil, raising questions about privacy and data sovereignty.

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The contracts, which include terms of use, privacy notices and data consent forms, appear to contain clauses that may violate national consumer protection laws. Additionally, these include provisions that allow WorldCoin to terminate services without compensation and clauses that waive users' rights to collective legal action.

THE TERMS PROVIDE THAT DISPUTES SHALL BE RESOLVED BY ARBITRATION IN FOREIGN LAW, IN PARTICULAR IN THE CAYMAN ISLANDS AND CALIFORNIA, UNITED STATES OF AMERICAN CIVIL AND COMMERCIAL LAW.

If convicted, WorldCoin could be fined up to 1 billion Argentine pesos ($1.2 million). Buenos Aires authorities have confirmed that the company is currently solely responsible for the fine.

Despite being banned in Spain, WorldCoin's daily user base reaches 2 million

Similarly, Spain has imposed a temporary ban on Worldcoin, citing concerns over privacy and data protection. Spain's data protection authority, AEPD, has called on WorldCoin to immediately stop its data collection activities, citing the serious threat posed to individuals' rights by processing biometric data.

The ban follows several complaints about the project's handling of user data, particularly data collected from minors, and its inability to revoke consent.

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WorldCoin countered the EIA, accusing it of misrepresenting its technology and ignoring EU law. Despite regulatory hurdles, Worldcoin's World app has experienced tremendous user growth, boasting 10 million users and 2 million daily active users worldwide.

However, the crypto project will continue to navigate the complex interplay between rapid expansion and regulatory compliance as it strives to maintain its global user base.