Hong Kong’s Privacy Watchdog Accuses Worldcoin of Violating Data Laws
Hong Kong’s privacy regulator has found that Worldcoin contravened local privacy laws and required the Worldcoin Foundation to cease all operations in the region.
Worldcoin, an iris biometric crypto startup co-founded by OpenAI chief executive Sam Altman, has found itself embroiled in controversy over its data collection practices in Hong Kong. The Privacy Commissioner’s findings have significant implications for the project’s future in the region.
Privacy Commissioner’s Findings
According to a report released by the Office of the Privacy Commissioner for Personal Data (PCPD) on May 22, the project has been found to contravene Hong Kong’s personal data (privacy) ordinance. This ordinance is crucial in protecting residents from invasive data practices. The San Francisco-headquartered startup’s handling of biometric data has been deemed risky and non-compliant with local laws.
Ada Chung Lai-ling, the Privacy Commissioner, highlighted that the face and iris images collected by the Worldcoin project were “unnecessary and excessive,” thus violating local requirements. The investigation revealed several key issues with Worldcoin’s data practices.
Issues with Data Collection Practices
The findings showed that Worldcoin’s data collection practices were both unfair and lacking in transparency. One major issue was the absence of privacy notices and biometric data consent forms in Chinese, which made it difficult for participants to fully understand the terms of participation. Additionally, operators failed to adequately explain these documents to participants, further complicating the consent process.
Another significant issue was the retention period for personal data. Worldcoin’s policy of holding onto personal data for up to 10 years was deemed excessive by the Privacy Commissioner. Ada Chung commented, “The retention period was too long and amounted to prolonged retention of personal data.”
Failure to Inform Participants
Furthermore, Worldcoin appears to have failed in informing participants of their data access and correction rights, which is a clear violation of privacy laws. This lack of communication exacerbates the concerns around transparency and fairness in data handling.
Enforcement Actions
As a result of these findings, the Privacy Commissioner has 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
PCPD’s investigation revealed that over 8,300 individuals in Hong Kong had their biometric data scanned to receive WLD tokens, which are designed to facilitate global transactions within the Worldcoin ecosystem. As of now, Worldcoin has not made any public statements regarding the allegations or the enforcement notice.
Worldcoin’s Background
Founded in 2019 by Sam Altman, Max Novendstern, and Alex Blania, Worldcoin aims to create a global digital identity platform using iris-scanning technology. The project has gained significant financial backing, securing $115 million in a Series C funding round in May 2023. Major investors include Blockchain Capital, Andreessen Horowitz (a16z), Bain Capital Crypto, and Distributed Global.
Conclusion
The accusations from Hong Kong’s privacy regulator represent a significant challenge for Worldcoin. The findings underscore the importance of adhering to local data laws and ensuring transparency and fairness in data collection practices. As Worldcoin navigates these legal and ethical hurdles, its future operations in Hong Kong and potentially other regions remain uncertain.
