Nikolas Sargeant
Brazil's National Data Protection Authority (ANPD) has ordered Tools for Humanity (TFH), the company behind Worldcoin's biometric data collection, to cease offering crypto or financial incentives in exchange for biometric data. The directive, effective January 25, follows an investigation launched in November after Worldcoin's World ID project began operating in Brazil.
Worldcoin, co-founded in 2019 by OpenAI CEO Sam Altman, uses iris-scanning technology to create a global digital identity and financial network.
Regulatory Concerns Over Biometric Data Collection
The project offers financial rewards, including cryptocurrency, to users who participate in its biometric data collection through a device called the "orb." However, the ANPD ruled that compensating users with crypto could undermine the validity of their consent. Under Brazilian law, consent for processing sensitive data must be free, informed, and unequivocal.
The watchdog expressed particular concern over the influence of financial incentives on individuals in vulnerable situations and the irreversible nature of biometric data collection, noting that once collected, such data cannot be deleted. The move by Brazil echoes similar concerns raised in Germany, where data protection authorities imposed corrective measures on Worldcoin in December, requiring compliance with the EU's General Data Protection Regulations.
The controversy has also impacted Worldcoin's native token, WLF. Over the past 24 hours, WLF's value has dropped by over 8%, falling below $2. The token, introduced in July 2023 to support the network, has seen a sharp decline of 83% from its all-time high of $11.74 in March, according to CoinGecko.
Worldcoin's Response and Future Development
Worldcoin has taken proactive steps to address data privacy concerns. Through initiatives like "Personal Custody," the project has reinforced its commitment to safeguarding users' biometric data, allowing individuals greater control over the storage and deletion of sensitive information.
Looking ahead, Worldcoin's upcoming Layer 2 network, World Chain, is poised to usher in a new era of scalability and efficiency for the project. With a developer preview already released, World Chain empowers developers to test and provide feedback on the network before its anticipated mainnet launch later this summer. The network's architecture, based on Ethereum within the Superchain framework, is designed to be permissionless, open source, and community-governed.
Last year, Worldcoin partnered with the web3 infrastructure platform Alchemy to equip developers with Alchemy's suite of tools and infrastructure to build the new World Chain blockchain. In September, Worldcoin also unveiled Face Auth, a security measure for identity protocol World ID. At the time, the team said it designed this measure to give World App users a greater level of security and fraud protection. World App is a digital wallet used by almost 15 million people worldwide.
