VeriChip Corp. Takes Downturn in Wake of RFID Caner-Link

Catherine Mullins / JBS | July 29, 2008

Editor’s Note: An earlier version of this newsfeed was incorrect in its reporting of Xmark as carrying the implantable chips. Due to updated information now available, the implantable chips are reported as being part of Verichip’s VeriMed Health Link division.  The newsfeed has been edited to reflect that change.

The size of two grains of rice, the tiny VeriChip, a microchip made to be implanted in the human body and transmit information about that person through radio signals, has huge Owellian implications. “The VeriChip Corporation markets the implant as a method of accessing medical records in an emergency, for use as a payment device, and as a way to control access to secure facilities,” consumer privacy advocate Katherine Albrecht describes in the newly released VeriChip FAQ. It sounds innocent enough, but numerous critics of the chip, including Dr. Albright, author of Spychips, How Major Corporations and Government Plan to Track Your Every Move with RFIDs, have brought to attention the fact “the implant could be surreptitiously used for tracking purposes through a network of local readers” by a government or agency that wanted to control a large group of people. Another risk is the possibility of hacking. David H. Holtzman in his Business Week article “Human ID Chips Get Under my skin,” pointed out: “All it would take is a careless employee to accidentally expose everyone’s number (the 16 digits on the chip that associate a person with his or her information) to an ill-intentioned hacker,” who then could use the personal information stored on a database in correlation to the numbers to access financial, medical, and security information about that person.

After the FDA approved these chips for use in humans, the reaction was intense. Groups began protesting the use of chips in humans, and numerous campaigns to prohibit foreseeable use of it began. Despite the controversy, the use of human “chipping” continued being discussed. Immigrants, the military, Alzheimer’s patients, and babies were the first candidates for being “chipped.”

Then the floodwaters broke. In 2007, Dr. Albrecht, the founder of CASPIAN (Consumers Against Supermarket Privacy Invasion and Numbering), brought out studies showing a connection between microchipped animals and cancer to the attention of the Associated Press. The Washington Post, in an article entitled “Chip Implants Linked to Animal Tumors,” reported: “A series of veterinary and toxicology studies, dating to the mid-1990s, stated that chip implants had ‘induced’ malignant tumors in some lab mice and rats,” and that furthermore, “Leading cancer specialists reviewed the research for The Associated Press and, while cautioning that animal test results do not necessarily apply to humans, said the findings troubled them. Some said they would not allow family members to receive implants, and all urged further research before the glass-encased transponders are widely implanted in people.”

On November 19, 2007, CASPIAN released the reports, entitled Microchip-Induced Tumors in Laboratory Rodents and Dogs: A Review of the Literature 1990–2006 showing how lab rats, mice and dogs contracted cancer from being implanted with RFID chips. Most of these studies were conducted for research reasons other than that of testing the VeriChip, but when both the control group (animals not exposed to chemicals being tested) and the experimental group were found to have contracted cancer from the microchips put in them for ID purposes, the conductors of the tests thought it significant enough to report.

Scott Silverman the, CEO of VeriChip, at first denied any knowledge of such tests, stating: “(the VeriChip company) was not aware of any studies that have resulted in malignant tumors in mice or rats, and certainly not cats or dogs.” Later, however, Silverman admitted certain studies were "omitted from the sheaf of studies included in the FDA application (for approval),” as Sobhean Morissy paraphrased in his article “Are Microchip Tags Safe?" It might be asked, what else might Mr. Silverman have concealed from the FDA?

Since the reports have come out, Mr. Silverman has been caught in a tangle of misstatements and VeriChip has gone down hard and fast. Over the past year the company lost more than 11 million dollars and its stock has dropped from over 10.47 dollars a share to less than two. “VeriChip’s media efforts have done little to salvage the company’s public image or its financial performance, both of which plummeted after research linking the implantable microchip to cancer was first widely revealed,” Dr. Albrecht reported. “The same company that once predicted revenues in the ‘billions’ earned just $3,000 from its microchip implant operations in the first quarter of 2008”

• A d v e r t i s e m e n t

On July 21, the true victory came. VeriChip sold its Xmark division of the company that comprised its main enterprise to Stanley Canada Company for $47.9 million. Xmark’s product line provides external RFID active tags for the healthcare market. Though this may seem like a lot, with over $24 million going to pay off debt and another $15 million allotted as dividends for shareholders, the company has made a minimal profit in comparison with its hopes. Mr. Silverman has stepped down as CEO, and the parent corporation, Digital Angel, has taken over what is left of the company.

VeriChip has now revealed plans to sell its VeriMed Health Link business — the Health Link division carries the implantable chips. The rest of the company is also for sale.

For the moment the substantial financial losses suffered by VeriChip tells us that the voice of the people has been heard:

“We don’t want microchips implanted in us for any reason and we won’t stop till the threat is gone!

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This article was posted: Wednesday, July 30, 2008 at 7:00 pm

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