China raises national security alarm as crypto scheme farms biometric data

China’s Ministry of State Security has warned that a foreign company is using crypto as a front to collect sensitive biometric information, including iris scans. It believes their activity will compromise individual privacy and national security.

Although the ministry did not call out the specific firm by name, the described tactics are similar to those employed by World, the blockchain project founded by OpenAI’s Sam Altman.

China claims biometric data misuse

In its press release, China’s Ministry of State Security affirmed that biometric recognition technology has quickly evolved, owing to its effectiveness and convenience. Nonetheless, it cautioned that with the rise of biometric scans, there is the added risk of data leaks and misuse. 

The ministry moved on to cite case examples of alleged data breaches. For starters, it noted a foreign business that directly linked its fingerprint-based payment platform to its internal data system, which hackers repeatedly accessed and extracted personal data.

Moreover, the industry pointed to foreign intelligence services that have unlawfully obtained facial data from important targets, forged it, and exploited it to access restricted information. These agencies, the ministry said, have even penetrated secure work environments to carry out espionage operations, severely threatening national security.

Additionally, it described a case involving a foreign company that, under the pretext of distributing cryptocurrency tokens, gathered iris data from users around the world and transferred the collected information elsewhere. The details, however, have led many to believe the company in question is World, previously known as Worldcoin.

Nonetheless, authorities have called on citizens to be vigilant when providing biometric data—such as facial features, fingerprints, or iris scans—especially to tech platforms. The ministry also advised users to request clear explanations on how their data will be handled, to examine privacy policies, and remain alert to potential over-collection closely.

World has faced scrutiny over its iris scans

World offers crypto tokens to users who submit iris scans, claiming the data helps build secure digital identities and expand financial access in underserved areas. The company also insisted that its World App is non-custodial, so users retain direct control of their World IDs and crypto. It explained that once an iris code is created, the raw image is encrypted, delivered to the user’s phone, and then deleted from its Orb. 

Furthermore, the iris data is anonymized through multiparty computation, which prevents any personal information from being stored. 

Despite these assurances, the project has come under scrutiny in some countries. In 2023, the Kenyan government even blocked it from signing up new users as it reviews privacy and data handling practices.

The country’s interior ministry raised concerns about the questionable security of iris scan storage, the ethical implications of trading crypto for personal data, limited details on cybersecurity protections, and the risks of allowing a private firm to control vast troves of biometric information.

World attracted users in Kenya by offering free tokens worth close to 7,000 Kenyan shillings, roughly about $54, a strategy that pulled in more than 350,000 Kenyans.

At the time, countries like Germany, France, India, and the UK had also voiced their concerns, saying they would be “making further inquiries” about the project.