YOU won’t BELIEVE how the Worldcoin Foundation is DEFYING all Crypto ODDS!

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You may recall that last month I attended the Financial Times’ annual “Next Web” conference in Amsterdam. For an event located at the crossroads of technology and finance, it was surprising to see fintech enthusiasts disavow cryptocurrencies.

As I reported at the time, most attendees told me that digital assets have had their time in the sun, and after being hit with an endless string of scandals, heads would inevitably turn away and they would embrace Silicon Valley’s shiny new toy: artificial intelligence.

OpenAI CEO Sam Altman did not receive the memo.

Its latest initiative, the Worldcoin Foundation, launched its services globally on Monday. Its goal is nothing short of ambitious: It offers a cryptocurrency traceable on the blockchain that requires users to prove their identity using a physical eye-gazing globe, increasing the number of available throughout the summer in more than 35 cities around the world .

This creates a global identification system that provides the infrastructure for distributing financial services and social aid, including the provision of a universal basic income.

As a loyal FT subscriber, chances are you’ve read my recent stories with venture capital correspondent George Hammond, in which we covered everything from the project’s launch to how Altman’s efforts to reshape the company could set him on course. collision with regulatory authorities.

Unlike those in Amsterdam who thought cryptocurrencies were making headway TO THE, the Worldcoin Foundation could finally mean that cryptocurrency has found its main ticket. Since bitcoin’s inception in 2009, the industry has tried unsuccessfully to hit a royal flush or deliver on its promise to cash in on the unbanked. But fueled by the seemingly unstoppable tide of artificial intelligence, things may finally be different.

Despite the mood shift in some quarters, there is another group that could turn against Altman: cryptocurrencies argue themselves.

Let’s not forget, the cryptocurrency industry was born at a time when trust in the traditional banking system was at an all-time low: the ashes of the 2008 financial crisis had just cooled off and the Bitcoin white paper called for a peer-to-peer electronic cash system, an original plan for cryptocurrency that, if successful, would eliminate the need for financial institutions altogether.

“Although Worldcoin is a big name project, it is not accepted by the real cryptocurrency community as it goes completely against the ethics of what the industry is about – decentralisation, trustless networks and privacy,” Charles Storry, Head of Growth at a DeFi project and on-chain index fund provider, he told me.

The beliefs that underpinned cryptocurrency’s nascent days – privacy, limited government, and financial freedom – still define many of the industry’s blueprints today, particularly in decentralized finance, where industry professionals only last week discounted government efforts by United States to reward open transaction data in the name of anti-money laundering requirements.

“The feeling is that Worldcoin wouldn’t get any traction or funding if it weren’t for Sam Altman, who is a big name in Silicon Valley. It’s just not what the industry is about,” added Storry.

When I spoke with Altman ahead of Worldcoin’s launch, I asked him if he was concerned that people would reject the idea of ​​a private company performing services typically run by governments.

“People ask me periodically, ‘Don’t you think this should be done by the government? Isn’t it awful that you’re doing this as a private tech company?’” she said. “Why don’t you ask the government why they aren’t doing these things, isn’t that the awful part?”

He also admitted that eye-scanning technology had a “clear ick factor,” but if Worldcoin takes off, Altman may have to account for time-honoured libertarian values ​​still dear to the very people whose eyes he would like to scan.

What is your opinion on Worldcoin? As always, write me at scott.chipolina@ft.com.

Weekly Highlights:

• This week, cybersecurity firm SonicWall released its mid-year threat report and found a huge increase in cryptojacking, the practice of hijacking another person’s computer to illegally mine cryptocurrencies. According to the company, there has been a 399% increase in global cryptojacking attacks in the last 12 months. Additionally, Europe and the UK were major hotbeds for cryptojacking activity, reporting a 788% and 479% increase in attacks, respectively.

• A victory for the cryptocurrency industry in Congress: This week the House of Representatives Financial Services Committee approved the Financial Innovation and Technology for the 21st Century Act, which near to “provide for a system of regulation of digital assets by the Commodity Futures Trading Commission and the Securities and Exchange Commission”. The proposal’s success has been hailed as a watershed moment for cryptocurrencies, but the text still has a long way to go before it becomes law.

• Leading blockchain analytics firm Chainalysis will work with blockchain practice and digital assets Deloitte, according to a blog post shared by the company this week. The cooperation will cover a number of areas, including anti-money laundering and knowledge of customer standards. “Our new alliance with Chainalysis is yet another demonstration of Deloitte’s investment in its digital assets innovation ecosystem for the benefit of our clients,” said Tim Davis, Deloitte blockchain and head of digital assets practice.

Bite of the week: A rare win for Sam Bankman-Fried

Last month, a court document filed in New York by Sam Bankman-Fried’s legal team shone a spotlight on the delicate relationship between the United States and the Bahamas since the collapse of cryptocurrency exchange FTX last November.

After initially facing eight charges, including charges of wire fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws, the former FTX head was hit with new charges after being extradited to the States United in December.

These included securities fraud and conspiracy to violate anti-corruption laws by paying $40 million to allegedly influence Chinese officials.

Since these charges did not serve as part of the basis for Bankman-Fried’s extradition from the Bahamas, the charges would have been dropped if the Bahamian government had not consented to the prosecution of US prosecutors.

And this is exactly what happened this week, when US attorney Damian Williams said the government would no longer pursue counting campaign contributions against the former cryptocurrency kingpin.

“The Government has been advised that the Bahamas notified the United States today that the Bahamas did not intend to extradite the defendant based on campaign contributions. Consequently, in line with its contractual obligations to the Bahamas, the government does not intend to proceed with the process on the counting of campaign contributions.

Data mining: signs of recovery for Coinbase

A key point of difference between industry leaders Coinbase and Binance this year is that Coinbase has managed to preserve its market share despite clashes with regulators.

Since the beginning of the year, Binance, the world’s largest exchange led by Changpeng Zhao, has divested roughly a significant share of its stake in the cryptocurrency spot trading market, falling from 55% to 40%. By comparison, despite a much more modest hold on the market, Coinbase’s share fell by less than a percentage point from 6.5 to 5.7%.

Cryptofinance this week is edited by John Aglionby. Please send any thoughts and feedback to cryptofinance@ft.com.