China Warns Iris Data Collection in Crypto Poses National Security Risk

China has issued a series of warnings over the past month regarding the potential national security risks associated with cryptocurrency projects that collect users’ biometric data, particularly iris scans. The Ministry of State Security (MSS) has emphasized concerns that such data—once collected—cannot be erased and could be misused or exploited by foreign entities. These warnings are part of a broader regulatory stance from Chinese authorities to mitigate threats arising from the convergence of digital finance and personal data collection [1].

Several recent statements from Chinese officials highlight the dangers of using biometric data as part of cryptocurrency incentive models. The MSS has specifically called out Worldcoin-style initiatives, where users are offered digital tokens in exchange for scanning their irises. Such practices, according to the MSS, could compromise personal privacy and national security, as sensitive data might be stored or transferred overseas [2].

The warnings began in mid-June, when the Chinese Ministry of National Security broadly flagged the risks of biometric recognition technology in the cryptocurrency space. This was followed by more specific alerts in late July and early August, with the MSS identifying iris data as a high-risk category due to its permanence and sensitivity [3]. The ministry emphasized that once this data is leaked or misappropriated, it could be used for identity theft or other malicious purposes.

In a statement published on the MSS’s official website, the ministry urged the public to exercise caution and avoid participating in such programs unless the legality and security of data handling are clearly established. The message reflects a growing regulatory caution around projects that blur the lines between financial incentives and data privacy [4].

Industry observers have noted that China’s stance aligns with its broader efforts to strengthen data governance and protect citizens from potential exploitation by foreign technology firms. The recent scrutiny of iris-scanning cryptocurrency programs also follows global concerns about data misuse, particularly in the context of decentralized finance and Web3 [5].

Sources:

[1] China warns Worldcoin-style iris data collection for crypto https://www.theblock.co/post/365752/chinese-security-ministry-flags-iris-national-threat

[2] China Warns Worldcoin-Style Iris Scanning a National ... https://www.coindesk.com/policy/2025/08/06/china-warns-worldcoin-style-iris-scanning-a-national-security-threat

[3] Chinese Ministry of National Security Warns of Risks ... https://news.bitcoin.com/chinese-ministry-of-national-security-warns-of-risks-associated-with-biometric-recognition-technology/

[4] China Warns of Biometric Data Risks in Crypto Sector Amid ... https://www.ainvest.com/news/china-warns-biometric-data-risks-crypto-sector-world-token-controversy-2508/

[5] Worldcoin under fresh scrutiny? China warns against ... https://crypto.news/worldcoin-under-fresh-scrutiny-china-warns-against-crypto-for-iris-trend/