The Office of the Privacy Commissioner for Personal Data (PCPD) in Hong Kong has served an enforcement notice to Worldcoin, a cryptocurrency project co-founded by OpenAI CEO Sam Altman, asking them to cease operations. The decision concludes the investigation that PCPD began in January 2024.
Hong Kong suspends Worldcoin activities
At the beginning of the year, Hong Kong's PCPD announced that it would investigate Worldcoin's activities because they may pose a “risk to personal data privacy.” The Privacy Commission investigated six Worldcoin facilities in Yau Ma Tei, Kwun Tong, Wan Chai, Cyberport, Central and Causeway Bay.
PCPD Privacy Commissioner Ada Chung Lai-ling found that the cryptocurrency project had breached the Data Protection Principles (DPPs) regarding data collection, data retention transparency, data access and rectification rights.
The Worldcoin project scanned participants' iris to verify their identity and obtain the project's native cryptocurrency, WLD.
According to the statementThe investigation revealed that participants were asked to allow some organizations to collect images of their faces and iris through “unnecessary and excessive” iris scanning.
The project confirmed that 8,302 individuals had their faces and irises scanned for verification during its work in Hong Kong. PCPD says the project “unfairly” collected personal data because important policies were not available in Chinese:
In particular, the relevant “Privacy Notice” and “Biometric Data Consent Form” were not available in Chinese, and the iris scanning device operators at the operating sites also did not provide any explanation or confirm participants’ understanding of the above documents.
The Privacy Commission considers that there is a lack of sufficient transparency for those who use the Chinese-language version to understand and agree to the relevant policies.
Additionally, Hong Kong's PCPD stated that Worldcoin did not inform participants of the risks involved in disclosing biometric data and did not answer users' questions. Therefore, the project violated the Personal Data Privacy Act (PDPO) as participants did not have “the necessary means to exercise their rights to access and correct data.”
Accordingly, the Commission requested the immediate cessation of Worldcoin Foundation's operations involving the scanning and collection of iris and facial images of the public using iris scanners in Hong Kong.
Global audit and the new system
The crackdown in Hong Kong is one of the many challenges Worldcoin faces around the world. Since its announcement, the project has faced global regulatory scrutiny from countries such as Germany, France and Kenya.
Amid global challenges, the Worldcoin Foundation recently unveiled a new open source system to address some of the issues raised by the authorities. The new system allows the project to adopt advanced data protection measures to more effectively “protect sensitive information.”
Through Secure Multi-Party Computation (SMPC), Worldcoin has increased the security of stored information by distributing data across different locations. As a result, Worldcoin deleted the iris tokens obtained during user registration.
Ultimately, the new approach aims to address concerns about the limitations, volume and costs of storing sensitive data, reducing the risk of security breaches.
WLD is trading at $5.05 in the weekly chart. Source: WLDUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com
