Hong Kong Halts Worldcoin Operation

The Hong Kong authorities have ruled that Worldcoin's operations in Hong Kong violate the data protection principles of the Privacy Ordinance and demanded the company stop collecting iris and facial images from members of the public. Hong Kong’s Office of the Privacy Commissioner for Personal Data (PCPD) concluded that the images collected were “unnecessary and excessive” and that the retention of sensitive personal data for ten years for AI model training was unwarrantedly long. The government also claims Worldcoin collected personal data unfairly, as users were not adequately informed of data collection terms. In particular, the relevant documents were not made available in Chinese. 

Local authorities have been investigating Worldcoin since the beginning of this year. The PCPD carried out ten covert visits from December 2023 to January 2024, and then, at the end of January, the privacy watchdog entered six of Worldcoin’s Hong Kong premises over suspicions that the company’s operation “involves serious risks to personal data privacy.”

Worldcoin confirmed that it has scanned the faces and irises of over 8,000 individuals during its operation in Hong Kong. Whether the company will be forced to delete this data and whether the existing accounts will remain active remains unclear. Interestingly, the Worldcoin website hasn’t included Hong Kong in the list of countries with available orbs since at least mid-May.  

Since launching in July 2023, the proof-of-identity mega project, Worldcoin, has collected data from over 5.3 million people worldwide. Sam Altman's project has faced tough criticism from the beginning, mainly over privacy issues. As the project grows its database, these issues will only intensify. Data regulators in the UK, Germany, France, Kenya, and Argentina started investigations into Worldcoin the first week after the company began worldwide operations. In August 2023, Kenya abruptly halted the company's activity in the country. By the end of last year, the company had stopped providing services in India, Brazil, and France.

This March, the Spanish Data Protection Agency took action against Tools for Humanity Corporation, the technology company behind Worldcoin headquartered in Germany. The Agency ordered the cessation of personal data collection due to complaints over inadequate information disclosure, data collection from minors, and inability to withdraw consent. The same month, Portugal halted biometric data collection for 90 days, and South Korea’s privacy authority announced an investigation into the project. Worldcoin claims it operates under close supervision of the Bavarian data protection authority and actively engages in cooperation with regulators. 

Despite multiple legal challenges this spring, the project's native token reached its ATH this March but fell significantly in April. The WLD price is strongly connected with its co-founder's ups and downs. Worldcoin’s native token is not available to U.S. customers allegedly due to general regulatory concerns and Altman's ongoing legal processes.

Currently, Worldcoin lists nine countries where Orbs are available for a visit: Argentina, Chile, Germany, Japan, the Republic of Korea, Mexico, Peru, the U.S., and Singapore. Argentina apparently is the most popular destination with 55 Orbs; Japan takes second place with 25 locations, while in the U.S., the company offers only five venues. The surge in Argentina can be explained by the local economic crisis. A population facing over 200% inflation is striving for extra money, and the $50 reward in the project native coin is lucrative enough to push locals to share their irises even though later many regret it. Local authorities have been investigating the project since last summer. Recently, the province of Buenos Aires charged the company for including “abusive clauses” in their terms of use and other infringements, such as the scanning of biometric data of minors. The company might be fined for over $1 million.

At the end of April, it was reported that Worldcoin is in partnership talks with Sam Altman’s other company, tech giant OpenAI. Some expect that this union would almost certainly draw additional regulatory attention. Even Alex Blania, Tools for Humanity CEO, suggested that the legal problems of the project might be connected with its prominent co-fonder:

“I think it’s just because of Sam. Just, like, much more attention than you would usually face as a company of that size or a project of that size,” - he told Bloomberg News.

Worldcoin claims that it operates lawfully in all of the locations where it is available. The number of such locations is rapidly shrinking while the number of unique humans on Worldcoin steadily grows.