An individual calling themselves Nadir Hajarabi, who claimed to have previously worked for Worldcoin, has alleged the human identity verification project may have committed illegal acts during their employment.
In an Aug. 23 YouTube video, Hajarabi said they witnessed “very questionable” activities at Worldcoin including “sloppy and/or illegal things” prior to quitting the project before its token launch on July 24. They claimed the organization was holding some of their pay, and were speaking with authorities in different jurisdictions as part of probes into Worldcoin.
According to Hajarabi, the Worldcoin project had a “horrendous execution” which involved cutting corners ahead of the release of its white paper, and they had seen red flags “from day one”. They said they contacted the Worldcoin CEO and the organization’s legal team but did not receive satisfactory answers for the alleged discrepancies in its mission versus execution.
Cointelegraph was unable to independently verify Hajarabi’s claims, though a photo posted to X appeared to show them with one of the project’s iris-scanning orbs. Their YouTube channel, created in September 2013, featured only one video with the allegations against Worldcoin. An X account which appeared to be controlled by the same individual posted a photo of an ETHGlobal Paris badge with Hajarabi’s name and affiliation with Worldcoin.
X posted by Nadir Hajarabi on Aug. 25 of an ETHGlobal Paris badge. Source: X
A LinkedIn page of Hajarabi appeared to be connected to the same individual in the YouTube video — a Paris resident with experience in nonfungible tokens, web3 projects, and smart contracts. Cointelegraph reached out to Worldcoin for comment, but did not receive a response at the time of publication.
The Worldcoin project started with the intention of distinguishing real people from bots by providing retinal scans for identity verification through the orbs. There were more than 2 million sign-ups prior to the launch of the Worldcoin token in July.
Ahead of the launch of the Worldcoin token and verification process, many in and out of the crypto space criticized the project, citing privacy concerns over user data. The Bavarian State Office for Data Protection Supervision reportedly began investigating Worldcoin in November 2022 while the French National Commission on Informatics and Liberty reportedly called its data collection methods “questionable.” The Information Commissioner’s Office in the United Kingdom has also raised similar concerns over the project.
In August, Kenya’s minister of internal security announced it would suspend Worldcoin’s local operations until authorities had the opportunity to assess any potential risk to residents, which reportedly included a raid and seizure of the organization’s equipment. Argentina’s Agency for Access to Public Information later announced a probe into Worldcoin’s collection, storage and use of customer data, citing security and privacy concerns.
An appellate court has granted a joint request from Ripple Labs and the Securities and Exchange Commission (SEC) to pause an appeal in a 2020 SEC case against Ripple amid settlement negotiations.
In an April 16 filing in the US Court of Appeals for the Second Circuit, the court approved a joint SEC-Ripple motion to hold the appeal in abeyance — temporarily pausing the case — for 60 days. As part of the order, the SEC is expected to file a status report by June 15.
April 16 order approving a motion to hold an appeal in abeyance. Source: PACER
The SEC’s case against Ripple and its executives, filed in December 2020, was expected to begin winding down after Ripple CEO Brad Garlinghouse announced on March 19 that the commission would be dropping its appeal against the blockchain firm. A federal court found Ripple liable for $125 million in an August ruling, resulting in both the SEC and blockchain firm filing an appeal and cross-appeal, respectively.
However, once US President Donald Trump took office and leadership of the SEC moved from former chair Gary Gensler to acting chair Mark Uyeda, the commission began dropping multiple enforcement cases against crypto firms in a seeming political shift. Ripple pledged $5 million in XRP to Trump’s inauguration fund, and Garlinghouse and chief legal officer Stuart Alderoty attended events supporting the US president.
Despite support for the end of the case coming from both Ripple and the SEC, the August 2024 judgment and appellate cases leave some legal entanglements. Alderoty said in March that Ripple would drop its cross-appeal with the SEC and receive a roughly $75 million refund from the lower court judgment. It’s unclear what else may result from negotiations over a settlement in appellate court.
New leadership at SEC incoming
Acting chair Uyeda is expected to step down following the US Senate confirming Paul Atkins as SEC chair on April 9.
During his confirmation hearings, lawmakers questioned Atkins about his ties to crypto, which could create conflicts of interest in his role regulating the industry. In financial disclosures, Atkins stated he had millions of dollars in assets through stakes in crypto firms, including Securitize, Pontoro and Patomak.
Italy’s minister of economy and finance warned that US stablecoin policies are more concerning than President Donald Trump’s tariffs, citing the potential for these crypto assets to undermine the euro’s dominance in cross-border payments.
Speaking at an event in Milan, Giancarlo Giorgetti said that while trade tariffs dominate headlines, new US policies on dollar-backed stablecoins present an “even more dangerous” threat to European financial stability, according to a Reuters report.
US stablecoins allow users to invest in a widely accepted method for cross-border payments without opening a US bank account, Giorgetti said. He warned that the growing appeal of US stablecoins to Europeans should not be underestimated.
Giorgetti urged European Union lawmakers to take more steps to boost the euro’s position as an international currency. He added that the digital euro under development by the European Central Bank (ECB) will be essential to minimize the need for Europeans to resort to foreign solutions.
US lawmakers advance stablecoin bills
Presently, stablecoin regulation in the US remains fragmented. Instead of a unified framework, multiple agencies apply existing laws to regulate stablecoins. However, lawmakers are working to implement changes, with several pieces of stablecoin legislation progressing.
On April 2, the US House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act. The bill is now headed to the House floor for a full vote.
The bill was introduced on Feb. 6 by Committee Chair French Hill and the Digital Assets Subcommittee Chair Bryan Steil. It would ensure that stablecoin issuers provide information on their businesses, including how their tokens are backed.
In addition, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act establishes rules that require issuers to maintain reserves backed one-to-one, comply with Anti-Money Laundering (AML) laws, protect consumers and boost dollar dominance in the global economy.
The GENIUS Act still requires approval by both chambers of Congress and a presidential signature before becoming law.
Apart from Giorgetti, ECB Executive Board member Piero Cipollone also urged European lawmakers to intensify their efforts to combat dollar-backed stablecoin dominance in Europe. On April 8, Cipollone wrote an article expressing concerns about the growing popularity of US stablecoins.
The official suggested launching a central bank digital currency to combat this threat to the euro. He said this would aid in preserving the monetary sovereignty of the eurozone.
Seychelles-based cryptocurrency exchange OKX announced that it is reentering the US market.
According to an April 16 blog post, OKX will return to the United States market along with the appointment of former Barclays director Roshan Robert as its US CEO. Robert said in the post:
“Today, I’m thrilled to announce the launch of OKX’s centralized crypto exchange and OKX Wallet in the United States, alongside the establishment of our regional headquarters in San Jose, California.“
All existing Okcoin users will be migrated to the new platform, which Robert said will lead to a better overall experience. The promised improvements include deeper liquidity, lower fees and advanced trading tools.
OKX will not roll out the upgrade in one shot. Instead, the new platform will take a phased approach to onboard new customers. The exchange plans to follow the cautious approach with a nationwide launch later in 2025.
“We’re beginning with a phased rollout for new customers to ensure a smooth and secure onboarding process, with a broader nationwide launch planned later this year,“ Robert said.
OKX also promised integrations with local banks and support for major assets, including Bitcoin (BTC), Ether (ETH), USDt (USDT) and USDC (USDC). Robert noted that the company maintains a global proof of reserves for all its assets, which is published monthly by cybersecurity firm Hacken.
Hacken had not responded to Cointelegraph’s request for comment by publication time.
In addition to its trading platform, the firm is also rolling out OKX Wallet to its US-based customers. The wallet supports 130 blockchains and features a decentralized exchange (DEX) aggregator, allowing access to over 10 million tokens on platforms including Ethereum, Solana and Base.
The exchange admitted on Feb. 24 to operating an unlicensed money-transmitting business in violation of US Anti-Money Laundering laws. As a consequence, OKX agreed to pay $84 million worth of penalties while forfeiting $421 million worth of fees earned from primarily institutional clients.
After the investigation concluded, OKX said it would seek out a compliance consultant to remedy the problems revealed by the federal probe and improve its compliance efforts. OKX’s CEO Star Xu wrote in a Feb. 24 X post:
“Our vision is to make OKX the gold standard of global compliance at scale across different markets and their respective regulatory bodies.”
OKX had not responded to Cointelegraph’s request for comment by publication time