Ecuador Doubles Down On Crypto Ban Following Worldcoin Controversy
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Loading... - Chenzira Ayman
- 29 Oct 2024
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Ecuador is reinforcing its ban on cryptocurrencies in light of the growing controversy surrounding Worldcoin (WLD), a crypto project co-founded by OpenAI CEO Sam Altman. Since its introduction in Ecuador in June, Worldcoin has attracted significant attention, prompting authorities to issue warnings about the potential risks associated with the project.
Worldcoin launched its World ID verification process in Ecuador at the end of June, with verification stations set up in six locations across Quito and Guayaquil. The project quickly gained traction, with reports of long lines forming as hundreds of Ecuadorians queued daily to participate in the iris-scanning process. Participants reportedly receive $30 in WLD tokens after completing the verification, with additional earnings possible through a referral program.
However, concerns have been raised regarding the informed consent of participants. Many individuals reportedly agreed to the verification process out of economic necessity, with some expressing confusion about the project's true nature. Local reports highlighted that individuals from lower socioeconomic backgrounds were particularly drawn to the opportunity, raising ethical questions about the project's outreach and consent practices.
The controversy intensified when Ecuador's newly established Data Protection Superintendency (DPS) revealed that Tools For Humanity, the company behind Worldcoin, had not notified authorities about its operations in the country. Fabrizio Peralta, the Chief Superintendent of the DPS, noted that the agency lacked the personnel and resources necessary to effectively monitor such activities.
In response to the growing concerns, the Superintendence of Companies (SOC) issued a press release warning Ecuadorians about the irregularities associated with Worldcoin. The SOC emphasized that the project is neither supervised nor regulated by the institution and advised citizens against providing biometric information in exchange for incentives.
Ecuador's Central Bank (ECB) reiterated its long-standing position on cryptocurrencies, clarifying that they are not recognized as legal tender or authorized means of payment in the country. The ECB highlighted that all monetary transactions must be conducted in US dollars, as stipulated by Article 98 of the Monetary Policy and Regulatory Board (JPRM).
The ECB also warned that any use of cryptocurrencies as a payment method would be subject to investigation and potential sanctions by the State Attorney General’s Office. This firm stance underscores the government's commitment to maintaining control over the financial system and protecting citizens from the risks associated with unregulated digital assets.
Ecuador's response to the Worldcoin controversy reflects a broader concern about the implications of cryptocurrency projects on public safety and data privacy. As the government reinforces its ban on cryptocurrencies, it emphasizes the importance of regulatory oversight and the protection of citizens' rights. The situation serves as a reminder of the complexities and challenges that arise in the rapidly evolving landscape of digital currencies and their impact on society.
