Hong Kong’s privacy authority has determined that Worldcoin, a cryptocurrency startup, violated local data privacy regulations, ordering the company to halt all activities in the region.
Worldcoin, an iris biometric crypto project co-founded by OpenAI CEO Sam Altman, is facing scrutiny over its data collection practices in Hong Kong.
A report by the Office of the Privacy Commissioner for Personal Data (PCPD) on May 22 revealed that Worldcoin’s handling of biometric data breached Hong Kong’s privacy laws. The San Francisco-based startup’s methods for collecting and storing iris data pose significant privacy risks, the PCPD stated.
Privacy Commissioner Ada Chung Lai-ling criticized Worldcoin for collecting “unnecessary and excessive” face and iris images, which is against local regulations.
The investigation highlighted that Worldcoin’s data collection practices were unfair and not transparent. The privacy notice and consent form for biometric data were not available in Chinese, and operators failed to adequately explain these documents to participants. The PCPD also found Worldcoin’s policy of storing personal data for up to 10 years to be excessive.
“The retention period was too long and amounted to prolonged retention of personal data,” said Ada Chung.
Furthermore, Worldcoin did not inform participants about their rights to access and correct their data, which is another violation of privacy laws. Consequently, the Privacy Commissioner issued an enforcement notice requiring Worldcoin to “cease all operations in Hong Kong involving the scanning and collecting of iris and face images.”
The PCPD’s investigation revealed that over 8,300 people in Hong Kong had their biometric data scanned to receive WLD tokens, which are intended to support global transactions within the Worldcoin system. Worldcoin has yet to respond publicly to these findings.
Founded in 2019 by Sam Altman, Max Novendstern, and Alex Blania, Worldcoin aims to create a global digital identity platform using iris-scanning technology. In May 2023, the project raised $115 million in a Series C funding round led by Blockchain Capital, with participation from Andreessen Horowitz (a16z), Bain Capital Crypto, and Distributed Global.
Summary Review: Worldcoin’s data collection practices in Hong Kong have raised serious privacy concerns, leading the local privacy regulator to take decisive action. The company’s handling of biometric data has been deemed excessive and non-compliant with Hong Kong’s privacy laws, prompting an order to stop all related activities. As the privacy watchdog continues to enforce strict data protection standards, Worldcoin’s situation serves as a cautionary tale for other tech firms operating in regions with stringent privacy regulations. The startup, co-founded by Sam Altman, now faces the challenge of addressing these legal issues while maintaining its vision of a global digital identity platform.
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