Black Market for Worldcoin Credentials Surfaces in China, Undermining Blockchain ID System

May 30, 2023

By Anjali Kochhar

In a surprising turn of events, the crypto project Worldcoin, spearheaded by OpenAI CEO Sam Altman, has gained significant attention in China, with users resorting to the black market for acquiring know-your-customer (KYC) verifications. Worldcoin aims to establish a global blockchain-based identification system utilising iris scans.

According to observations by CoinDesk, Worldcoin’s crypto wallet, known as World App, is not accessible in mainland China. This is primarily due to Beijing’s stringent regulations on foreign social media apps and the collection of user data under strict Internet rules. However, it remains uncertain whether Chinese users can download the app from China’s app stores, as Worldcoin did not confirm this information at the time of publication.

Interest in Worldcoin surged on Chinese social media platforms, with searches for the Worldcoin hashtag increasing from zero to nearly 20,000 on Weibo, China’s equivalent of Twitter, throughout May. On WeChat, another popular social media app, searches peaked on May 18, growing by 225% compared to the previous day. Notably, Worldcoin and OpenAI founder Sam Altman testified before the U.S. Congress on May 16, which may have contributed to the heightened interest in the project.

Simultaneously, a black market emerged on Chinese social media and e-commerce platforms, where individuals offered KYC verifications for the World App, which provides wallet and identification services. Social media posts indicated that these credentials often originated from countries like Cambodia and Kenya.

Worldcoin acknowledged that several hundred instances of such activity had taken place but reassured that no sensitive data had been compromised. The company stated that suspicious and potentially fraudulent activities were detected, where individuals were incentivised to sign up for a verified World ID, which was then delivered to a third party’s World App instead of their own.

The existence of this black market undermines one of Worldcoin’s core objectives: to establish and propagate a globally utilized blockchain-based identification method utilising iris recognition. The sign-up process for Worldcoin involves visiting a local representative who scans the user’s iris using a futuristic metal orb, anonymising and storing the data locally. The startup envisions this “privacy first, self-custodial, decentralized” ID to become the foundation of the internet in the future, although it is currently employed for the startup’s wallet app.

Worldcoin has been enticing users with promises of free tokens for sign-ups and recently announced a partnership with decentralized email provider Dmail, offering free non-fungible tokens (NFTs) to new users.

Chinese crypto site Blockbeats initially reported the existence of the black market, revealing that fake iris scans were available for as little as $20. Listings for Worldcoin access have appeared on Taobao, China’s equivalent of Amazon, with options ranging from a simple app download for RMB 9.9 ($1.41) to full KYC certification for RMB 499.

Tools for Humanity, a company co-founded and led by Sam Altman and Alex Blania, is responsible for building Worldcoin. The project consists of World ID, the identification method, and World App, the wallet application.

About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.

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