A prominent crypto lawyer, John Deaton, has recently expressed his reservations about the distribution model of the newly launched token, Worldcoin.
The reluctance of Worldcoin co-founder Alex Blania to reveal details about the token’s distribution model during a recent Bankless interview has fueled this skepticism. Amidst regulatory uncertainties in the US, Blania’s refusal to answer these critical questions has raised many eyebrows, leading to a widespread discourse about the transparency and potential of Worldcoin.
Wtf did this dude just say? Did he literally say that he can’t talk about how WorldCoin is distributed “because of the regulatory uncertainty” in the United States? 🤦♂️
If there was ever a signal to RUN AWAY as fast as you can from a project, HERE IT IS. Is he saying he can’t… https://t.co/e2f7V7pxTa
— John E Deaton (@JohnEDeaton1) July 24, 2023
Refusal to divulge distribution details: A red flag?
During the interview, when asked to explain the distribution of Worldcoin’s native token, WLD, Blania reportedly stated;
“Look, many of the details we can’t talk about here for the regulatory uncertainty in the United States.”
His refusal to reveal key information about Worldcoin’s token distribution led to speculations about its credibility, with some questioning if it’s another case of ‘ponzinomics.’ An X user, @Pledditor, who posted the video clip of the interview, captioned it;
“When a crypto founder refuses to answer questions about token distribution.”
The video immediately sparked controversy and went viral, leading to mixed reactions from the crypto community.
John Deaton’s dismay over Blania’s reluctance
In response to the unfolding controversy, John Deaton, a crypto lawyer known for representing some XRP holders, aired his views. Deaton expressed that Blania’s reluctance to discuss the token’s distribution model is enough to make investors cautious about the project. In a tweet, Deaton also criticized the SEC and its Chair, Gary Gensler, for contributing to the current regulatory chaos in the crypto space.
“But this is an example of the chaos caused when you have bad faith regulators like @GaryGensler intentionally keeping the regulatory environment as unknowable,” Deaton noted.
Worldcoin’s bumpy start?
The controversy surrounding Worldcoin’s token distribution model comes just two days after its highly-anticipated WLD token was launched. Despite the controversy, WLD managed to get listed on major crypto exchanges like Binance, Gate.io, JPEX, and KuCoin immediately after its launch.
— Binance (@binance) July 24, 2023
Currently, the WLD token trades at $2.21 with a 24-hour trading volume of approximately $396 million, as of writing, crypto price tracker CoinMarketCap data showed. However, concerns about WLD’s circulating supply versus its supply cap persist, with only 1% of the total supply currently in circulation.
Ethereum’s Vitalik Buterin weighs in
Ethereum co-founder Vitalik Buterin also shared his views on Worldcoin’s token launch. He noted that the project’s ‘proof-of-humanity’ concept could potentially offer a solution to bot and AI-driven activities on the internet. Buterin posted an extensive essay on X, reflecting on the potential implications of Worldcoin’s token launch on digital identity and income inequality.
What do I think about biometric proof of personhood?https://t.co/yozo1buW24
— vitalik.eth (@VitalikButerin) July 24, 2023
Despite the mixed reactions, Worldcoin allegedly aims to address online identity authentication and income inequality. The project’s commitment to the ‘proof-of-personhood’ concept and its potential implications on digital identity remains unshaken.
The controversies surrounding Worldcoin’s token distribution model underscore the need for more clarity in crypto. While regulators like the SEC must strive to provide a more straightforward regulatory environment, it is also incumbent on crypto projects to be as transparent as possible to gain investor confidence. Only then can the true potential of cryptocurrencies be realized.