Brazil Orders Worldcoin to Cease Crypto Rewards for Biometric Data Collection
Brazil’s National Data Protection Authority (ANPD) has directed Tools for Humanity (TFH), the company behind Worldcoin, to halt offering cryptocurrency or financial incentives in exchange for biometric data. The order, effective January 25, follows an investigation launched in November after Worldcoin’s World ID project began operating in the country.
Worldcoin’s Controversial Biometric Data Practices
Founded in 2019 by OpenAI CEO Sam Altman, Worldcoin uses iris-scanning technology to create a global digital identity and financial network. The project incentivizes users with financial rewards, including cryptocurrency, for participating in biometric data collection via its device called the “orb.”
The ANPD determined that compensating users with crypto could compromise the validity of their consent, which, under Brazilian law, must be freely given, informed, and unequivocal. Concerns were raised over the impact of financial incentives on vulnerable populations and the irreversible nature of biometric data collection, as such data cannot be deleted once captured.
International Concerns and Impact on WLF Token
Brazil’s action mirrors similar measures taken by Germany. In December, Germany’s data protection authority required Worldcoin to comply with the EU’s General Data Protection Regulations (GDPR) due to concerns over its handling of biometric data.
This controversy has affected Worldcoin’s native token, WLF, which has fallen over 8% in the past 24 hours, dropping below $2. Since its introduction in July 2023, the token has plummeted by 83% from its all-time high of $11.74 in March, according to CoinGecko.
Worldcoin’s Response and Future Developments
Worldcoin has introduced initiatives to address privacy concerns, such as the “Personal Custody” program, which allows users greater control over the storage and deletion of their biometric data.
Looking forward, Worldcoin plans to launch its Layer 2 network, World Chain, designed for scalability and efficiency. A developer preview of the network has been released, with the mainnet launch expected this summer. Built on Ethereum’s Superchain framework, World Chain aims to be open-source, permissionless, and community-governed.
Worldcoin has also partnered with web3 infrastructure platform Alchemy to provide developers with tools for building on the new blockchain. Additionally, in September, the project unveiled Face Auth, a security measure for its identity protocol, World ID. This feature enhances security and fraud protection for users of the World App, a digital wallet currently used by nearly 15 million people globally.
Conclusion
Brazil’s move to restrict Worldcoin’s crypto-based incentives highlights ongoing concerns over the ethical and legal implications of biometric data collection. As Worldcoin works to address these issues and expand its network, its ability to balance innovation with regulatory compliance will shape its future in the global digital identity landscape.
