Key Points:
- Indonesia’s digital regulator has suspended Worldcoin and World ID services, citing unlicensed operations and misuse of registration credentials.
- Two local partners, PT Terang Bulan Abadi and PT Sandina Abadi Nusantara, are under investigation for violating electronic system regulations.
- The move reflects growing global scrutiny of iris-scan identity technologies.
- To resume, Worldcoin must address registration gaps, improve data practices, and rebuild public trust.
Table of Contents
Unexpected Suspension and Its Immediate Impact
Indonesia’s Ministry of Communication and Digital Affairs has revoked the licenses for Worldcoin’s token and biometric identity services, forcing both platforms offline during a regulatory review. Authorities emphasized that this is a temporary protective measure—not a permanent ban—while possible breaches of the Electronic System and Transactions Law are examined. The local operators are being called to account for failing to secure the required Private Electronic System Operator (PSE) registration or improperly sharing certificates across services.
Focus on Regulatory Compliance
According to Government Regulation 71/2019, all private digital services must register as PSEs and obtain an Electronic System Operator Registration Certificate (TDPSE). PT Terang Bulan Abadi allegedly operated without registering, while PT Sandina Abadi Nusantara’s certificate was misused for both crypto exchange and biometric identity services—suggesting credential misuse. The regulator deemed these issues serious enough to warrant a service freeze until full compliance is demonstrated.
Rising Privacy Concerns
Worldcoin’s key tool—the Orb device—scans users’ irises to generate unique World IDs. While the company uses encrypted storage and zero-knowledge proofs for security, critics argue that mass collection of sensitive biometric data increases risks of stalking, identity theft, or data misuse. Many Indonesians provided eye scans in exchange for tokens without clear assurances about how their data would be managed long term. Authorities flagged these vulnerabilities as another reason for the suspension, cautioning users about sharing their biometric data with unregistered platforms.
Part of a Broader Global Trend
Indonesia’s action follows similar regulatory pushbacks worldwide. Kenya cited privacy concerns, Hong Kong suspended operations over licensing issues, and Spain and Portugal paused iris scans pending data protection reviews. These setbacks challenge Worldcoin’s vision of becoming the backbone of decentralized identity systems and could slow adoption.
What Worldcoin Must Do Next
To lift the suspension and restore regulatory trust, Worldcoin needs to:
- Secure Licenses: Obtain the proper TDPSE registrations under valid entities.
- Conduct Audits: Engage third-party auditors to review its data collection and storage practices.
- Clarify Consent: Revamp user onboarding to ensure transparent data usage and retention policies.
- Strengthen Partnerships: Collaborate with compliant, locally registered partners familiar with Indonesian law.
A successful resolution in Indonesia could guide the company’s approach in other regions and help validate its privacy-focused identity model.
By the Numbers:
- 200,000+ iris scans collected in Indonesia.
- 4% of global World ID registrations come from Indonesia.
- 3 million World IDs issued globally.
- 60 days: Deadline for Worldcoin to resolve registration issues or face possible permanent shutdown.
Indonesia’s decisive action may hinder Worldcoin’s growth in Southeast Asia, but it also highlights a critical message: regulatory compliance and consumer protection are non-negotiable in biometric identity projects. The coming months will test whether Worldcoin can meet these demands and sustain its vision of a global, privacy-conscious identity solution.
