Hong Kong Halts Worldcoin Activities

In a recent development, Hong Kong’s Office of the Privacy Commissioner for Personal Data (PCPD) has served an enforcement notice to Worldcoin, a crypto project co-founded by OpenAI’s CEO Sam Altman, demanding the cessation of its operations. This action concludes the investigation initiated by the PCPD in January 2023.

At the outset of this year, the PCPD had brought Worldcoin’s activities under investigation, citing potential risks to personal data privacy. The Privacy Commission meticulously inspected six Worldcoin facilities across various locations in Hong Kong, uncovering violations of the Data Protection Principles (DPPs) related to the collection, retention transparency, data access, and correction rights.

One of the contentious practices discovered during the investigation was Worldcoin’s use of iris scanning to verify participants’ identity and facilitate the receipt of the project’s native cryptocurrency, WLD.

It was found that during its operation in Hong Kong, 8,302 individuals had their faces and irises scanned for verification. The PCPD stated that the project collected personal data “unfairly,” highlighting that important policies were not made available in Chinese, compromising the transparency and consent of Chinese-speaking participants.

Furthermore, the PCPD pointed out that Worldcoin failed to adequately inform participants about the risks associated with the disclosure of their biometric data and did not provide satisfactory responses to users’ inquiries. This lack of transparency and the infringement of individuals’ rights to data access and correction led the commission to demand an immediate halt to Worldcoin’s iris and face data collection operations in Hong Kong.

Global Scrutiny and New System

This enforcement notice from Hong Kong adds to the series of global regulatory challenges faced by Worldcoin. However, the Worldcoin Foundation has responded by unveiling a new system designed to address the concerns raised by regulatory authorities, emphasizing enhanced data protection and security measures.

Through its new open-source system and secure multi-party computation (SMPC), Worldcoin aims to strengthen the security of stored information by distributing data across different locations, effectively reducing the risk of security breaches. Notably, Worldcoin has confirmed the deletion of the iris codes obtained during user registration, as part of its commitment to safeguard sensitive data.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.