Worldcoin is facing fresh scrutiny after ZachXBT accused the project of using low-float token economics, biometric incentives and OTC sales in ways that left retail holders carrying the risk.
On-chain investigator ZachXBT put Worldcoin back under pressure on April 28, arguing that the project's token launch looked less like broad community distribution and more like a playbook built around scarcity, hype and insider advantage. WLD launched in July 2023 with roughly 140 million tokens in circulation against a 10 billion token supply, leaving only about 1.4% of the total supply available at the start. Market makers also received 100 million tokens through loan arrangements with call options, creating the kind of thin early float that can exaggerate price moves before ordinary buyers understand the supply that is still waiting to enter the market.
That structure now matters because the token has not grown into its valuation. WLD has fallen about 97% from its all-time high near $11.74 to roughly $0.25, while scheduled unlocks and treasury sales continue to weigh on sentiment. The problem is not just that the price went down. In crypto, that happens often. The sharper concern is that supply kept expanding while demand failed to keep pace, a setup that benefits early insiders and professional counterparties far more than the retail buyers who arrive after the story has already been sold to them.
ZachXBT also pointed to project-linked wallet activity and OTC sales as evidence that large holders had ways to reduce exposure away from public order books. Some of those claims remain allegations based on wallet tracing, but the broader pattern is hard to ignore. When tokens move through private deals before or during periods of market weakness, public holders are left watching the chart without the same visibility or access. That is why the criticism has landed. It is not only about one transaction, but about whether World's token design created a market where insiders could manage their exit while users were encouraged to believe in a long-term identity network.
The identity pitch was always the more ambitious part of Worldcoin. The project, now branded as World, says its Orb devices create a World ID that proves a person is human and unique at a time when AI is making online identity easier to fake. More than 10 million people have reportedly verified through the system, many after being offered small WLD grants. In Kenya, where more than 350,000 people registered in 2023, authorities suspended operations over security, financial and data-protection concerns before later closing a criminal probe. The episode showed how quickly a futuristic identity product can become a regulatory problem when biometric data and cash-like incentives meet lower-income populations.
There have also been repeated reports of black markets around verified World IDs. Earlier reporting from CoinDesk and other crypto outlets found credentials being offered through Chinese online channels, with accounts or verification access sourced from countries including Cambodia and Kenya. World has said such cases affected only a limited number of users and that sensitive biometric data was not shared. Even so, the existence of a market for verified accounts cuts directly against the project's central promise. If a proof-of-personhood system can be bought, rented or transferred, the uniqueness claim becomes much harder to defend.
That is the uncomfortable gap at the center of the Worldcoin story. The project is trying to solve a real problem, but it built that solution around a token whose economics have invited suspicion and a biometric onboarding model that regulators were always going to examine closely. Social media arguments around Elon Musk, Sam Altman and ZachXBT may drive the latest round of attention, but the harder issue is simpler: users gave up something deeply personal, and many of them received a token that has collapsed in value.
Predatory Onboarding
The harshest criticism is that World's growth relied too heavily on places where a small crypto payout could feel meaningful. Agents and local operators helped drive sign-ups in countries including Kenya and Indonesia, often presenting the scan as a quick way to receive tokens rather than as participation in a long-term identity experiment. Kenyan regulators raised questions about consent, data security and the role of Tools for Humanity, the company behind World. Those concerns do not disappear because the technology is impressive. A biometric system asks users to trust a private company with information they cannot replace if something goes wrong.
World has repeatedly argued that its architecture protects privacy and that iris images are not stored in a way that exposes users to direct biometric theft. That distinction matters, but it does not settle the debate. The Orb process, cloud infrastructure, operator network and token incentives all create points where public trust can break down. ZachXBT's charge that the project preyed on lower-income users is blunt, but it reflects a broader question any identity startup must answer: are people giving informed consent, or are they accepting a short-term payment without understanding the long-term tradeoff?
Insider Cashouts
The token side has only made that question sharper. According to Lookonchain, World sold about 226.43 million WLD through an OTC transaction in late March 2026, receiving roughly $63 million in USDC at an average price near $0.28. Reports said the sale took place over about nine to ten days and was framed as funding for operations, research, manufacturing and ecosystem growth. That explanation may be accurate, but it does not erase the market signal. When a project sells a large block near historic lows, holders naturally ask whether they are funding the network or absorbing its supply overhang.
OTC sales can reduce immediate pressure on public exchanges, which is why projects use them. They also reduce transparency for ordinary investors, who usually do not know the buyer, the lock-up terms or whether the tokens will eventually return to the open market. That opacity is what gives ZachXBT's claims traction. If insiders or treasury-linked entities can sell privately while retail investors face unlock schedules, volatility and limited information, the token begins to look less like shared ownership and more like a financing instrument for everyone except the late buyer.
Tokenomics Trap
Worldcoin's low-float launch is now the heart of the controversy. A small circulating supply can support a high early valuation, especially when the market is excited by a big idea and a famous founder. But when the rest of the supply starts entering circulation, that same structure becomes a trap. The price chart tells the story. The promise was a global identity network for the AI age. The market experience for many holders has been dilution, unlock anxiety and a steady stream of questions about who is selling.
The rebrand from Worldcoin to World may help the project move beyond the token-first perception, but it does not remove the baggage. Sam Altman's role keeps attention high, and the rise of AI gives proof-of-personhood real relevance. That is exactly why the next phase matters. If World wants to be treated as critical identity infrastructure, it will need more than ambitious language and polished hardware. Investors will be watching unlocks and OTC movements. Regulators will be watching biometric consent. Users should be watching whether the project's incentives finally align with the people it claims to serve.
Also read: Solana Seeker's 150k pre-orders mask a hardware product nobody actually wants • Block launches consumer Bitcoin suite at Bitcoin Las Vegas with Cash App Square Lightning payments • BTC Markets' one-day staking opt-in grabs user yields without risk sharing
