What is behind the collapse of the price of Worldcoin (WLD) by 50%
Date: 2023-08-27 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
The Worldcoin cryptocurrency project, led by ChatGPT creator Sam Altman, is under scrutiny from regulators around the world.
The project's use of human iris scanners has raised concerns about possible violations of data protection laws. The WLD tokenomics, ways of doing business and its potential risks also raised a lot of questions among the members of the crypto community.
All these factors led to the fact that just a month after the successful listing on the leading cryptocurrency exchanges, the price of the native Worldcoin token fell by 50%.
The authorities took up arms against Worldcoin
According to CoinGecko data, WLD is trading at $1.29, down 53% from its peak price of $2.71 on launch day.
One of the reasons for the sharp drop in Worldcoin quotes was the actions of the authorities. Regulators around the world are investigating the activity of the project: the collection of biometric data potentially violates data protection laws.
Thus, the German regulator has been pursuing proceedings against an American startup since November 2022. The activities of the project were also of interest to the British Office of the Information Commissioner and the French data protection regulator. Kenya's Interior Ministry has suspended the project in the country and sent officers, backed by interagency officials, with a search warrant to Worldcoin's offices. The Agency for Access to Public Information (AAIP) of Argentina was also interested in the activities of the project.
Market participants lose confidence in WLD
The disappointing dynamics of the Worldcoin price was also influenced by reports from auditors about numerous vulnerabilities in the project code.
Nethermind identified 26 protocol security issues, Least Authority found three more, and CertiK discovered a vulnerability that could potentially allow hackers to compromise user data and bypass the identity verification process.
All this naturally led to a decrease in the excitement around Worldcoin. According to data from analytics platform Santiment, over the past 30 days, the social volume and social dominance of WLD have decreased by 95% and 74%, respectively.
The initially published Worldcoin whitepaper spoke of the project's ambition to participate in the global financial system and offer banking services to those who do not currently have access to traditional products. It seems that at the moment all these ambitious statements are far from reality.
