Hong Kong’s privacy regulator has determined that Worldcoin, an iris biometric crypto startup co-founded by OpenAI chief executive Sam Altman, has violated local privacy laws. The Worldcoin Foundation has been instructed to cease all operations in the region.

Worldcoin’s Data Collection Controversy

Worldcoin, headquartered in San Francisco, has been scrutinized for its data collection practices in Hong Kong. According to a report released by the Office of the Privacy Commissioner for Personal Data (PCPD) on May 22, the project contravenes Hong Kong’s personal data (privacy) ordinance. The primary concern is the privacy risks associated with how the startup handles biometric data.

The Privacy Commissioner, Ada Chung Lai-ling, stated that the collection of face and iris images by Worldcoin was “unnecessary and excessive,” thereby violating local privacy requirements.

The retention period was too long and amounted to prolonged retention of personal data.

The PCPD report indicated that Worldcoin’s data collection practices were unfair and lacked transparency. The privacy notice and biometric data consent form were not available in Chinese, and operators failed to adequately explain these documents to participants. Furthermore, the retention of personal data for up to 10 years was considered excessive.

Additionally, Worldcoin did not inform participants of their data access and correction rights, further violating privacy laws. Consequently, the Privacy Commissioner issued an enforcement notice directing Worldcoin to “cease all operations of the Worldcoin project in Hong Kong in scanning and collecting iris and face images of members of the public using iris scanning devices.”

Impact and Response

The PCPD’s investigation revealed that over 8,300 individuals in Hong Kong had their biometric data scanned to receive WLD tokens, designed to facilitate global transactions within the Worldcoin ecosystem. As of now, Worldcoin has not made any public statements regarding the matter.

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 secured $115 million in a Series C funding round led by Blockchain Capital, with participation from Andreessen Horowitz, Bain Capital Crypto, and Distributed Global.

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