China Warns of Biometric Data Risks in Crypto Sector Amid World Token Controversy

China’s Ministry of State Security (MSS) has issued a public warning about the risks associated with biometric data collection by cryptocurrency companies, emphasizing the potential threats to both personal privacy and national security. In a bulletin published on August 6, 2025, the agency highlighted concerns over the misuse of high-precision biometric methods, including iris and facial recognition, particularly when collected under the guise of cryptocurrency distribution [1].

The MSS specifically referenced an unidentified overseas company that collected iris data from users globally while distributing tokens, a practice described as a potential security threat due to the irreversible nature of biometric data. Once compromised, iris patterns or facial features cannot be altered, making them highly sensitive and difficult to protect [2]. The agency warned that such information could be exploited for identity theft, surveillance, and even espionage if improperly stored or accessed by unauthorized parties [3].

The referenced firm appeared to be Sam Altman’s World, which has been collecting iris data in 160 countries as part of its user verification process tied to its WLD token. While the company is not operating in China, the MSS highlighted the broader implications of such practices, especially when biometric data is collected by foreign entities with unclear data governance and security protocols [4].

The MSS also cited past instances where biometric data had been misused by foreign intelligence agencies, including infiltration attempts into secure workplaces. This underscores the growing concern over the use of biometric technologies in both public and private sectors [5].

In response to these concerns, Ethereum co-founder Vitalik Buterin proposed a pluralistic digital identity model in June 2025. This approach aims to balance privacy and inclusivity by allowing users to verify their identities through multiple decentralized sources, rather than relying on a single, trackable identifier. Buterin emphasized that rigid identity systems could lead to surveillance risks and exclusion, particularly for lower-income individuals [6].

The MSS’s warning aligns with global concerns over data privacy and the ethical use of biometric technologies. As digital identity systems become more integrated into financial and technological ecosystems, regulatory scrutiny is expected to intensify. The case of World highlights the tension between innovation in crypto-based identity verification and the need for robust privacy protections [7].

The bulletin concluded by urging individuals to remain cautious when providing biometric information and to assess the risks associated with sharing such data. As the use of biometric technologies continues to expand, governments and private entities are under increasing pressure to ensure that data collection practices are transparent, secure, and aligned with international privacy standards [8].

Sources:

[1] China Raises Concerns Over World Token’s Biometric Data Collection and Potential Privacy Risks

[2] https://en.coinotag.com/china-raises-concerns-over-world-tokens-biometric-data-collection-and-potential-privacy-risks/