Worldcoin (WLD) Slips 3% as It Sunsets Data Storage Amid Regulatory Pressure

Fri, 22/03/2024 – 17:00

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Worldcoin has slipped about 3% to $8.07 following the unveiling of its data control known as Personal Custody, a model meant to address regulators’ concerns about data privacy. Market reaction following the announcement has upset Worldcoin’s performance with sharp sell-offs.

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The concept of Personal Custody — a groundbreaking approach recommended by privacy experts — was first unveiled alongside the introduction of World ID 2.0 and intends to reform the way personal data is handled, empowering individuals with unprecedented control over their information.

Reforming data handling with Personal Custody

Personal Custody signifies a shift in the handling of data generated during World ID verification, including images, metadata and derived data, which is securely held on the user’s device.

This novel approach grants users not only the ability to delete their data but also to control its future use before deletion; it is a level of autonomy that was previously unavailable. The significance of this is that it is a departure from the default practice of data deletion.

One of the key advantages of Personal Custody is its ability to unlock new World ID use cases, particularly through Face Authentication for high-security applications. With Face Authentication, users can verify their identity at any time locally on their device, without the need for their data to leave their phone.

Additionally, optional Data Custody will no longer be offered during orb visits, ensuring that users have the opportunity to learn about Worldcoin before deciding to share their information. Experts say that with this level of user control, the privacy concerns of the Spanish authorities over its use of eye-scanning technology for data collection should be reconsidered.

Personal Custody’s impact on Worldcoin’s performance

Analysts say that Personal Custody’s regulatory scrutiny will be less on Worldcoin. In late January, the Hong Kong Privacy Commissioner’s Office (PCPD) initiated an inquiry into Worldcoin under a court warrant. The authorities concentrated on potential significant privacy risks related to personal data and possible breaches of the Privacy Ordinance.

Despite that, the blockchain-based biometrics verification company has soared to new heights to hit a new all-time-high of $11.82 on the back of a sustained bullish rally. However, analysts have predicted that the long-term benefits of this innovative approach, including reduced regulatory scrutiny and enhanced user control, will ultimately contribute to Worldcoin’s sustained growth despite initial market sentiment.

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