Faces Data Privacy Legal Challenges

• Hong Kong PCPD investigates six Worldcoin locations for personal data privacy risks.
• Worldcoin faces legal scrutiny for collecting iris biometric data in defiance of data protection rules.

The Worldcoin project, launched in Hong Kong by Sam Altman, CEO of ChatGPT’s parent company OpenAI, has sparked controversy over personal data privacy. Offering 25 WLD digital currencies in exchange for iris scanning and registration, the project has faced an investigation by Hong Kong’s Office of the Commissioner of Personal Data Privacy (PCPD). Six locations in strategic points of the city, such as Yau Ma Tei and Wan Chai, were inspected under court order.

Worldcoin was launched in Hong Kong last year, and Hong Kong users could receive 25 digital coins, WLD, after completing iris identification and registration. However, on Wednesday afternoon (31), under a court order, the PCPD entered six Worldcoin project premises in Hong Kong, located in Yau Ma Tei, Kwun Tong, Wan Chai, Cyberport, Central and Causeway Bay to conduct an investigation.

The Commissioner for Personal Data Protection, Ms. Loretta Chung, has called on the public to increase their vigilance regarding the World Coin venture. She stressed the importance for citizens to exercise caution in safeguarding their sensitive personal information by avoiding indiscriminate involvement in initiatives that collect sensitive personal data, such as iris scan ning.

It is paramount that individuals assess the authenticity and reliability of entities before handing over their biometric information:

• The legitimacy in the accumulation of biometric information.
• The purpose and scope of the collection of this data.
• The use to which the information will be put, along with the entities or persons to whom the information will be disclosed or transferred.
• The retention period of the biometric data.
• The security strategies implemented for the protection of this data.

The Hong Kong Privacy Commissioner’s Office today entered six Worldcoin shops in Hong Kong to conduct an investigation based on a court warrant, and stated that Worldcoin involves serious personal data privacy risks and may involve violations of the Privacy Ordinance.…

— Wu Blockchain (@WuBlockchain) January 31, 2024

The core of the dispute lies in the collection of biometric data, specifically the iris, and its handling by Worldcoin. The PCPD argues that these practices could violate Hong Kong’s Personal Data Protection Ordinance (PDPO), given the sensitive nature of the information collected.

Commissioner Loretta Chung has urged the public to be cautious when sharing biometric data, stressing the importance of assessing the legitimacy and security of the organizations requesting it.

The PCPD’s concern focuses on several critical issues: the legality and purpose of data collection, the use and transfer of the information collected, the duration of storage, and security measures to protect this data.

In a context where privacy is becoming an increasingly relevant issue, this case highlights the need for a balance between technological innovation and safeguarding individual rights.

The Worldcoin project seeks to establish a digital identity system and digital currency entity using blockchain technology, which includes World ID, WorldCoin and WorldAPP. However, this ambitious project is now under the scrutiny of data protection laws, highlighting the ethical and legal challenges facing cryptocurrency and blockchain initiatives today.

This case is not only relevant to Worldcoin users in Hong Kong, but also serves as a wake-up call for the global cryptocurrency community on the importance of personal data protection.

As blockchain technology continues to evolve and offer new possibilities, the need for clear regulations and respect for user privacy becomes increasingly imperative. The PCPD’s investigation in Hong Kong is a clear example of how technological advances must go hand in hand with social responsibility and compliance with privacy laws.

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