Hong Kong Orders Worldcoin to Cease Operations Citing Privacy Concerns

Hong Kong regulators on Wednesday, May 22, directed Worldcoin to cease operating, citing privacy concerns. The regulator indicated that the eye-scanning Orbs operators could tap the data to ascertain one’s humanity effectively. 

Through the Privacy Commissioner for Personal Data (PCPD), the government issued a cease order alleging that the Worldcoin project contravened the privacy rules. The PCPD directed the citizens to report if they witnessed Worldcoin running operations within its borders. 

The privacy commissioner enforced the cease notice to the Worldcoin Foundation to exit Hong Kong. The notice prohibited iris scanning to collect data from the public. The PCPD downplayed the necessity of collecting face and iris images, deeming the exercise excessive. 

Hong Kong Regulators Downplay Necessity to Collect Iris Images

The privacy regulator submitted that Worldcoin’s process of collecting personal data was unfair as it failed to issue privacy notices. PCPD accuses the Worldcoin Foundation of failing to issue consent forms in Chinese, besides the nondisclosure of possible risks, leaving participants unaware of the purpose of the data collection. 

Although the Orb hardware constitutes a signature component of the project’s operation, the authorities downplayed the necessity of their use to verify one’s humanity. 

The PCPD report indicated that scanning face images of the participants to ascertain their humanness was unnecessary since the iris scanning device operators were present to undertake the verification process at the locations.

The PCPD traces to 1996 when it was established as an autonomous body overseeing the enforcement of personal data protection laws enforcement. Its decision to kick out Worldcoin is unsurprising, given the concerns expressed over the exercise in other jurisdictions. 

Worldcoin is a project started by Tools for Humanity in 2022, with OpenAI chief executive Sam Altman among the co-founders. The company is tasked with stewarding the non-profit Worldcoin Foundation and utilizes the Orb iris scanners to generate World ID. 

The World ID application seeks to combat bots to ascertain that users in a system are only permitted to actual people. Worldcoin issues WLD tokens to the participants to allow the scanning of their biometrics. 

Worldcoin Violated Hong Kong Privacy Rules

Tools For Humanity estimates that it has attracted over 10 million participants across 160 countries since unveiling the World ID application. The disclosure forecasts that over 5 million users have their identity verified using the Worldcoin Orbs hardware. 

The PCPD considers that biometric data constitutes sensitive personal data that could translate to grave consequences when leaked or wrongfully disclosed. 

The PCPD argues that the project could have considered other less privacy-intrusive alternatives to verify the participant’s identity. The regulator found collecting face and iris images unnecessary, which contravened the data protection principles applied across Hong Kong.  

The prohibition on operating in Hong Kong came after Worldcoin opened the core components on Github in March. The initiative would enable the researchers to assess the technology intensely following the privacy concerns regarding the Orb iris scanners.  

Worldcoin indicated that open sourcing-was necessary to bolster transparency, verifiability, and trust in the Orb iris scanners. Besides, it encouraged the developer communities to seize the opportunity and advance technology. 

The open-sourcing of the code behind the iris scanning was made available just as it did for the Orb hardware in 2022.

Worldcoin’s WLD Market Activity

Meanwhile, the enforcement action undertaken by PCPD hardly eroded the fortune of the WLD token, which rallied 0.5% in the past 24 hours to exchange hands at $5.03, as per CoinGecko. The token’s market value is estimated at $1.077 billion from the 210 million tokens to rank 92 873,870 on CoinGecko. 

Wolrdcoin’s WLD token is yet to regain the $9 price attained when Altman returned to OpenAI following the board-engineered exit. Besides, WLD is 57% of the all-time high of $11.74, achieved in March of this year. 

Further assessment of WLD activity shows that the token has suffered a 1.90% price decline in the past seven days. Consequently, WLD trails the global crypto market, which is up 8.70%, and lags cryptos in the Andreessen Horowitz (a16z) portfolio that surged by 27.40%, as per CoinGecko. 

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