Key Takeaways:
- Indonesia suspends the World project due to unregistered iris-scanning operations.
- Using shell entities for licensing violates Indonesian digital laws.
- Users question the ethics of trading biometric data for crypto rewards.
Indonesia has suspended the operating certificates of Sam Altman’s digital identity venture, World (formerly Worldcoin), after investigators flagged registration irregularities and “suspicious activity” in an announcement on May 4.
The country’s Ministry of Communication and Digital (Komdigi) found that the project operated without proper permits, using a shell entity to bypass local laws.
Worldcoin’s Bait-and-Switch in Indonesia Reveals Crypto’s Regulatory Loopholes
Komdigi’s investigation revealed that World’s local partner, PT Terang Bulan Abadi, failed to secure the mandatory Electronic System Operator Certificate (TDPSE).
Instead, the project operated under PT Sandina Abadi Nusantara, whose permit did not cover iris‑scanning services.
In a press release, Komdigi’s Director‑General, Alexander Sabar, labeled the switch “a serious violation” and warned that any digital provider that borrows another firm’s credentials breaks Indonesian law.
Public opinion is divided, as some applaud the crackdown, calling World a “scam,” while others argue that cash‑strapped Indonesians may find value in trading iris data for World’s WLD tokens.
Regulators have ordered World to halt new sign‑ups during the suspension period and will question both operators.
Komdigi’s intervention threatens to slow that momentum. Under Indonesian law, digital platforms that fail to secure a valid TDPSE face sanctions up to permanent blacklisting.
Indonesia joins a growing list of governments pushing back against the eyeball‑for‑crypto model launched in July 2023.
Data protection watchdogs in Germany, Kenya, and Brazil have already opened probes. Despite this, World pressed ahead with its U.S. expansion last week, scheduling orb‑based verifications in Atlanta, Austin, Los Angeles, and other states.
American users will receive Worldcoin (WLD) after passing the scan and receiving a World ID.
Will Indonesia’s Youth Drive Global Crypto Dominance?
The suspension of World in Indonesia is especially influential because the country represents one of the fastest-growing crypto markets.
Asia’s fourth-largest country by population, Indonesia, saw crypto transaction volume skyrocket to over $30 billion in 2024, up from $6.5 billion the previous year, a 352% increase.
The country now has over 20 million active traders on local and global platforms as of 2024. Chainalysis ranks Indonesia among the top crypto adopters worldwide, thanks to its growth in Southeast Asia.
Youth investors drive this boom, with more than 60 percent of users aged 18–30. Tokens like Bitcoin, Ether, USDT, and Solana remain the most traded assets.
Local exchanges recorded 716,000 registered accounts, underlining growing retail and institutional interest. Regulators also eased restrictions by enacting CoFTRA Regulation No. 9 of 2024, which opened doors for institutional participation and sparked a September rally.
A dual-tax policy imposed in 2022 temporarily cooled market activity, but 2024 volumes have already surpassed the combined totals of 2022 and 2023.
Indonesia’s policymakers are now debating revising the “double tax” on crypto gains to sustain momentum. This would help the nation cement its status as a fast-emerging global crypto hotspot, outpacing many peers in adoption and technical advancements.
Did Sam Altman’s World Just Lose Its Hold on Asia’s Crypto Hotspot?
Indonesia’s crackdown on the World project isn’t just a local dispute—it’s a warning shot. Across Southeast Asia, resistance to unchecked data harvesting by Western tech firms is mounting.
For example, Singapore’s regulators are already investigating World over biometric data and money laundering risks.
Tech giants once exploited lax oversight in emerging markets—not anymore. Nations like Indonesia enforce strict data sovereignty, so even Sam Altman-backed ventures can’t ignore local laws.
Asian nations like Malaysia and Thailand, with a similar demographic profile and rising crypto use, will scrutinize World’s compliance before granting the project access, as user data becomes a guarded asset for these nations.
The monitoring goes beyond the continent. Germany, Kenya, and Brazil are also investigating World’s biometric data model.
Despite this, the World Network is pushing ahead elsewhere. The project recently partnered with Circle to integrate USDC stablecoins into its network. It has also expanded to the U.S., offering $WLD tokens in exchange for iris data.
The development in Asia marks a shift and proves a hard truth. Regulatory shortcuts are no longer permissible, even in crypto-friendly markets.
Frequently Asked Questions (FAQs)
Unlike Indonesia’s centralized system, the U.S. already enforces strict state-level biometric laws. These laws levy hefty fines for collecting biometric data without consent, making covert workarounds legally and financially perilous. In addition, U.S. regulators and a strong tradition of class-action litigation actively penalize violations, discouraging shell-entity tactics.
Yes, easing the “double tax” (VAT + income tax) could incentivize institutions, especially as CoFTRA’s 2024 regulations already allowed their entry. However, lingering regulatory uncertainty around asset classification may still deter conservative funds.
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