Key Takeaways:
Grayscale Investments disclosed in a Securities and Exchange Commission filing that the 100 largest wallets hold about 90% of the circulating Worldcoin supply, raising centralization concerns as the asset manager seeks approval for a spot WLD exchange-traded fund.
The disclosure appeared in the risk factors section of Grayscale's Form S-1 registration statement, filed July 20 for the proposed Grayscale Worldcoin ETF on Nasdaq under the ticker GWLD. The filing states that a relatively small group of early adopters controls a substantial share of tokens already released, making WLD more concentrated than its long-term distribution goals suggest.
"The 100 largest wallets held approximately 90% of all WLD in circulation as of the filing date," Grayscale said in the prospectus. The asset manager warned that this concentration presents a material risk for prospective investors, as coordinated selling or holding by a small group could influence the token's price.
Worldcoin's whitepaper had outlined a vision where most WLD tokens would eventually be claimed by individuals who verified themselves as unique humans through the project's Orb-based identity system. Grayscale's filing contradicts that narrative, noting that governance remains largely under the World Foundation and that World Chain continues to rely on a centralized sequencer and upgrade functions controlled by a limited group tied to Tools for Humanity and Optimism.
The filing also highlights that one of the largest addresses belongs to the bridge connecting Ethereum and World Chain, meaning part of the concentrated holdings may represent assets deposited by multiple users rather than a single owner. Even so, Grayscale presented the overall concentration level as a key risk factor.
WLD traded at $0.38 as of Wednesday, up about 4.5% since the ETF announcement but still 97% below its all-time high of $11.74 reached in March 2024. The token hit an all-time low of $0.2279 on May 17. Circulating supply stands at 3.5 billion tokens out of a total cap of 10 billion, with continuous insider unlocks expected to add supply through 2028.
Beyond token concentration, the filing outlines additional centralization risks. Seven countries — Spain, Portugal, Germany, Hong Kong, Brazil, Kenya and Indonesia — have taken regulatory action against Worldcoin over its biometric data collection practices. The Orb devices used to verify users are still manufactured and distributed mainly by or under the direction of Tools for Humanity, according to the filing.
If approved, the trust would hold WLD directly and use the CoinDesk Worldcoin Benchmark Rate to determine its net asset value. BitGo Bank & Trust would serve as custodian, while BNY Mellon would act as administrator and transfer agent. Grayscale has not yet disclosed the management fee, seed investment or the number of WLD represented by each share.
The SEC filing does not guarantee regulatory approval, and Nasdaq cannot list the product unless regulators sign off on the registration process. Bloomberg ETF analysts confirmed the filing but noted that amendments will be necessary before any final decision. The S-1 filing represents an early step in what could be a lengthy approval process, with the SEC's stance on WLD's concentration and centralization likely to be a focal point of review.
This article is for informational purposes only and does not constitute investment advice.
