The Hong Kong Office of the Privacy Commissioner for Personal Data (PCPD) has issued an enforcement notice to Worldcoin, a crypto project co-founded by OpenAI CEO Sam Altman, asking them to cease his activities. The resolution concludes the investigation launched by the PCPD in January 2024.
Hong Kong shuts down Worldcoin operations
At the beginning of the year, the Hong Kong PCPD announcement it would investigate Worldcoin’s activities because they could 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 crypto project violated the Data Protection Principles (DPP) regarding collection, transparency of retention, access to data and rights of rectification.
The Worldcoin project scanned participants’ irises to verify their identity and receive the project’s native cryptocurrency, WLD.
According to statementThe investigation found that participants were required to allow certain organizations to collect their faces and iris images through iris scanning in an “unnecessary and excessive” manner.
The project confirmed that the faces and irises of 8,302 people were scanned for verification during its operation in Hong Kong. The PCPD claims the project collected personal data in an “unfair” manner because important policies were not available in Chinese:
In particular, the corresponding “Privacy Notice” and “Biometric Data Consent Form” were not available in Chinese, nor were the operators of the iris scanning devices at the operating sites no longer provided explanations or confirmed participants’ understanding of the above-mentioned documents.
The Privacy Commission considers that there is a lack of sufficient transparency for those using the Chinese language version to understand and accept the relevant policies.
Additionally, the Hong Kong PCPD said Worldcoin failed to inform participants of the risks of revealing biometric data or respond to users’ questions. Therefore, the project violated the Personal Data Privacy Ordinance (PDPO), as participants did not have the “means to exercise their rights of access and rectification of data”.
On this basis, the commission requested immediate intervention cease of the Worldcoin Foundation’s operations involving scanning and collecting images of the public’s irises and faces using iris scanning devices in Hong Kong.
Global review and new system
The crackdown in Hong Kong is one of many challenges Worldcoin faces around the world. Since its announcement, the project has faced global regulatory scrutiny from countries including Germany, France and Kenya.
Amid global challenges, the Worldcoin Foundation recently revealed a new open source system to address some of the issues raised by authorities. The new system allows the project to adopt advanced data protection measures to “protect sensitive information more effectively.”
Through its Secure Multi-Party Computing (SMPC), Worldcoin has increased the security of stored information by distributing the data to different locations. As a result, Worldcoin removed the iris codes obtained during user registration.
Ultimately, the new approach aims to address concerns around sensitive data storage, scale and cost limits, thereby 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
