Hong Kong’s privacy watchdog has taken decisive action against Worldcoin, a controversial iris biometric cryptocurrency startup co-founded by OpenAI CEO Sam Altman. The Office of the Privacy Commissioner for Personal Data (PCPD) revealed on May 22 that Worldcoin had breached local privacy regulations, leading to an order to halt all operations within the region.

Worldcoin, established to develop a global digital identity platform through iris-scanning technology, has come under fire for its data handling practices. The PCPD's investigation uncovered significant violations of Hong Kong’s Personal Data (Privacy) Ordinance, highlighting serious risks associated with the startup's biometric data collection methods.

Ada Chung Lai-ling, Hong Kong's Privacy Commissioner, criticized Worldcoin’s practices, stating that the collection of face and iris images was “unnecessary and excessive,” failing to meet local privacy standards. The PCPD report emphasized that the startup's methods were not only unfair but also lacked transparency. Notably, critical privacy notices and consent forms were not provided in Chinese, and the process for obtaining participant consent was inadequately explained.

Moreover, the PCPD found Worldcoin’s retention of personal data for up to ten years to be excessively long, describing it as “prolonged retention of personal data.” The investigation also revealed that participants were not properly informed about their rights to access and correct their data, constituting further breaches of privacy laws.

As a result, the Privacy Commissioner has issued an enforcement notice demanding that Worldcoin cease all operations related to the scanning and collection of iris and face images in Hong Kong. The report noted that over 8,300 individuals in Hong Kong had already had their biometric data scanned as part of Worldcoin's operations to distribute WLD tokens, designed to facilitate global transactions within the project's ecosystem.

Worldcoin has yet to issue a public statement in response to these findings. Founded in 2019 by Sam Altman, Max Novendstern, and Alex Blania, Worldcoin has quickly gained attention and financial backing, securing $115 million in a Series C funding round in May 2023. The funding round was led by Blockchain Capital, with significant contributions from Andreessen Horowitz (a16z), Bain Capital Crypto, and Distributed Global.

The ongoing controversy in Hong Kong raises significant concerns about the implications of biometric data use and privacy in the burgeoning field of digital identities and cryptocurrencies. As regulatory scrutiny intensifies, the future of Worldcoin’s operations in other regions may also come into question.