Brazil’s National Data Protection Authority (ANPD) has issued a directive ordering Tools for Humanity (TFH), the company behind the World ID project, to cease operations in the country.
Starting January 25, 2025, TFH must stop offering financial or crypto-based compensation for collecting biometric data from Brazilian citizens.
The decision follows an investigation launched in November 2024, shortly after the project began in Brazil.
Why the Ban?
The ANPD’s enforcement division raised concerns about the methods employed by the World ID project to obtain consent from users.
Under Brazilian data protection laws, consent for processing sensitive personal data, such as biometric information, must be free, informed, unequivocal, and specific to a particular purpose.
The regulator determined that offering cryptocurrency as a reward for submitting iris scans could compromise the voluntary nature of user consent. “TFH’s compensation policy may interfere with an individual’s free judgment regarding the provision of biometric data,” the ANPD explained.
The watchdog emphasized that vulnerable populations could be disproportionately affected by such offers, potentially leading to undue influence in their decision-making.
What is the World ID Project?
Co-founded in 2019 by OpenAI CEO Sam Altman, the World ID project aims to create a universal digital identity system and financial network using iris biometrics. The initiative employs cutting-edge technology developed by Tools for Humanity, which scans irises through its futuristic “Orb” device.
Worldcoin, the cryptocurrency associated with the project, was launched in 2023. The token leverages iris recognition to distinguish humans from machines, addressing concerns of identity verification in an era of rapid artificial intelligence (AI) advancements. Despite its innovative goals, the project has been embroiled in controversy over privacy and data protection.
Also Read: Worldcoin Breaks $2 Barrier, Holder Sentiment Shifts Bullish
Global Scrutiny
Brazil is not the first country to take regulatory action against the World ID project. Similar concerns have led to restrictions in Germany, Spain, and Kenya. Regulators around the world have expressed concerns about the possible abuse of biometric data collecting and its irreversible nature.
Concerns have not entirely been allayed despite Tools for Humanity’s emphasis on privacy through initiatives like secure multi-party computation, user control, iris code deletion, and data minimisation.
Market Impact and Future Challenges
The regulatory decision comes at a challenging time for Worldcoin. As of now, the Worldcoin token (WLD) is trading at $1.82, down more than 12% in the last 24 hours.
The global market cap for the cryptocurrency stands at $1.74 billion, while the 24-hour trading volume has surged by 53.80%, reflecting heightened activity amid the controversy.
Despite regulatory hurdles, World Network continues to develop its ecosystem, recently launching the World Chain mainnet and upgrading its World App and Orb devices.
However, its long-term success depends on addressing privacy concerns and ensuring compliance with global data protection laws.
Also Read: Sam Altman’s Worldcoin Deploys Safe Core On World Chain, Price Drops 3%