China warns foreign crypto firm over iris data collection amid security concerns

China’s national security authorities have issued a public warning against a foreign cryptocurrency firm suspected of collecting iris biometric data in exchange for digital tokens. The Ministry of State Security (MSS) has identified the practice as a potential threat to personal information security and national sovereignty, with speculation pointing toward Worldcoin, a project led by Sam Altman, as the primary suspect [1]. The company reportedly uses a handheld device called an "Orb" to scan users’ irises and issue tokens in return, a process that generates a digital identity known as "World ID" [2].

The MSS has emphasized that iris data is irreplaceable and cannot be reset if compromised, unlike traditional passwords. This characteristic increases the risk of long-term identity theft and surveillance [3]. The ministry has also pointed to potential geopolitical implications, noting that biometric data could be exploited for cyberattacks, blackmail, or broader surveillance efforts if it is transferred overseas [4]. The warning aligns with China’s broader regulatory stance on cryptocurrency, including its 2019 trading ban and 2021 crackdown, which positioned such activities as threats to financial stability and state security [5].

Worldcoin has already faced scrutiny in other jurisdictions. In 2023, France’s CNIL privacy regulator raised concerns over the legality of its data collection methods, and a 2021 report by MIT Technology Review highlighted the project’s operations in developing countries with unclear data protocols. The latest allegations from China have intensified global regulatory attention, with some experts predicting stricter oversight of token-based data collection schemes [6].

The market has responded to the warnings, with the price of WLD, Worldcoin’s native token, falling 4.45% and trading volume rising 24% in a 24-hour period following the announcement. This volatility reflects both investor uncertainty and growing concerns over the ethical and legal dimensions of biometric data usage in the Web3 space [7].

The MSS has urged the public to remain vigilant about where and how their biometric data is being collected. It emphasized the need for transparency and informed consent when engaging with platforms that request such sensitive information. China’s regulatory framework, including the Cybersecurity Law and the Personal Information Protection Law, already imposes strict controls on biometric data, and the agency has reiterated that these standards must be upheld with even greater scrutiny in the context of cryptocurrency [8].

The incident highlights the broader debate around the role of biometric data in digital identity and financial systems. While iris scanning may offer a high level of security, its misuse could undermine trust in emerging technologies. The Chinese government’s response serves as both a warning and a call for greater accountability, urging both regulators and users to balance innovation with privacy protection [9].

Source:

[1] MEXC, [https://www.mexc.com/news/worldcoin-under-fresh-scrutiny-china-warns-against-crypto-for-iris-trend/63935](https://www.mexc.com/news/worldcoin-under-fresh-scrutiny-china-warns-against-crypto-for-iris-trend/63935)

[2] X (formerly Twitter), [https://cryptorank.io/news/feed/86282-china-accuses-foreign-firm-misusing-crypto-surveillance-iris-scanning](https://cryptorank.io/news/feed/86282-china-accuses-foreign-firm-misusing-crypto-surveillance-iris-scanning)

[3] CoinMarketCap, [https://www.coingabbar.com/en/crypto-currency-news/iris-scan-crypto-security-threat-by-china-question-worldcoin?srsltid=AfmBOoqLGoh8hNzUiBw7fwfeEKG0IlWRrFoZdlRke7LSFaUIUUwdZvep](https://www.coingabbar.com/en/crypto-currency-news/iris-scan-crypto-security-threat-by-china-question-worldcoin?srsltid=AfmBOoqLGoh8hNzUiBw7fwfeEKG0IlWRrFoZdlRke7LSFaUIUUwdZvep)

[5] VISI.NEWS, [https://visi.news/china-accuses-foreign-firm-of-stealing-iris-data-via-crypto-scheme-calls-it-a-national-security-threat/](https://visi.news/china-accuses-foreign-firm-of-stealing-iris-data-via-crypto-scheme-calls-it-a-national-security-threat/)

[6] Odaily, [https://www.odaily.news/en/newsflash/403982](https://www.odaily.news/en/newsflash/403982)

[7] Coinpedia, [https://coinpedia.org/crypto-live-news/](https://coinpedia.org/crypto-live-news/)