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China’s Security Concerns Over Biometric Data Collection by Foreign Entities
In a recent development, China’s Ministry of State Security (MSS) has issued a cautionary statement regarding the collection of biometric data by foreign companies, likely referencing Worldcoin. This practice involves offering cryptocurrency rewards in exchange for biometric information, which has raised significant concerns about both individual privacy and national security.
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This alert, shared on the agency’s official WeChat account, highlights instances of widespread iris data collection associated with crypto token distributions. Although the MSS did not explicitly identify the project, the description strongly suggests a link to Worldcoin, an initiative by Tools for Humanity. Worldcoin has gained notoriety for deploying “orb” devices to scan users’ irises to generate unique digital IDs and distribute its cryptocurrency token, WLD.
The MSS emphasizes that transferring such sensitive data to foreign entities not only jeopardizes personal privacy but also poses a threat to national security, as biometric data could be misused beyond its intended applications.
Intensifying Global Focus on Biometric Data in the Crypto Industry
China’s warning adds to the growing global scrutiny concerning biometric data collection within the digital currency sector. Launched in 2023, Worldcoin has encountered regulatory investigations across various regions, primarily due to concerns about data protection and user consent.
In May, Indonesian authorities revoked the project’s operating license following reports of inconsistencies related to Worldcoin’s identity verification processes. In response, Tools for Humanity announced a voluntary suspension of its proof-of-personhood operations in Indonesia while addressing licensing ambiguities.
This is not China’s first expression of apprehension regarding cryptocurrency-associated risks. Historically, the nation has enforced stringent regulations on digital asset trading and initial coin offerings (ICOs), prioritizing consumer protection and financial stability. Recently, Shenzhen’s financial regulator issued a warning about deceptive schemes masquerading as stablecoin investments.
The MSS statement broadens the perspective, stressing that biometric data collection tied to cryptocurrency incentives could have national security implications, especially if foreign entities manage or store such sensitive information.
Privacy and Regulatory Challenges in the Crypto Ecosystem
The unfolding scenario underscores a broader discourse on privacy, identity verification, and decentralized finance. Proponents of projects like Worldcoin argue that iris scans provide a secure and scalable means of verifying human identity online, potentially aiding in distinguishing genuine users from bots in Web3 environments.
Critics, however, caution that once biometric data is collected, it remains vulnerable to misuse or unauthorized access, regardless of encryption or anonymization measures.
China’s public announcement suggests potential increased scrutiny of foreign crypto projects operating within its borders or collecting data from Chinese citizens. This mirrors global regulatory movements, where authorities strive to balance technological advancements with safeguarding sensitive personal data.
In Europe, data protection authorities have launched investigations into Worldcoin’s operations under the General Data Protection Regulation (GDPR). Similarly, Kenya temporarily suspended Worldcoin registrations due to parallel privacy concerns in 2023.
The MSS advises the public to remain vigilant against offers exchanging personal data for cryptocurrency rewards.
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