Company: ORBS
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023549
Chunk: 129

Company: Eightco Holdings Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 129
---
 trigger
regulatory backlash.

Worldcoin’s
global collection of biometric identifiers exposes it to heightened reputational risk and criticism from civil groups, privacy advocates,
and non-governmental organizations (“NGOs”) that view all organizations collecting biometric data from individuals as a form
of “data colonialism.” Particularly in the Global South, technology companies and investors in wealthier nations that collect
personal biometric data may be considered entities that are replicating historical patterns of exploitation by providing technology companies
and investors financial incentives to vulnerable communities in exchange for very valuable personal data that may be used beyond the
purpose of establishing an identity. These groups argue that individuals in lower-income regions may have limited understanding of the
use of the data required to give fully informed consent. Opposition of this kind can produce both regulatory and reputational consequences.
While regulatory scrutiny is a risk, even in the absence of regulatory scrutiny, public criticism regarding privacy practices could damage
the project’s brand. With social media increasing the ability to communicate to large numbers of people in a short period of time,
negative public sentiment could occur quickly. Negative public sentiment could discourage new users from enrolling and cause current
users to close out their accounts. Loss of public confidence would likely limit market expansion, weaken strategic partnerships, and
reduce liquidity or demand for WLD, regardless of the project’s legal compliance. Allegations of data colonialism or exploitation
could discourage Orb operators, enterprise partners and prospective users from engaging with Worldcoin, slowing adoption even in markets
where the system is legal. Negative media coverage, NGO reports, or coordinated campaigns could also lead to investigations, mandatory
audits, and costly compliance obligations, any of which could materially reduce user growth, impair token demand, and damage Worldcoin’s
long-term prospects. Any of these events could have an adverse impact on the value of the Company’s common stock.

Worldcoin’s
proof-of-personhood model, on its own, is likely to not comply with current global KYC/AML requirements in many jurisdictions, including
in the US, UK and EU; the model of biometric scanning replaces the obligation to deliver documentation of a person’s country of
origin and proof of residence, for example, and therefore by itself is non-compliant with existing frameworks. Systems liked Wordcoin’s
“proof-of-personhood” do not verify identity but verify uniqueness.

Worldcoin’s
“proof-of-personhood” approach, which verifies that each participant is a unique human through biometric scanning while allowing
them to remain pseud