China Warns Iris-Scanning Crypto Projects Threat National Security

China’s Ministry of State Security (MSS) has raised alarms over the increasing use of biometric data by cryptocurrency-linked projects, particularly those involving iris scanning, warning that such practices pose significant threats to both personal privacy and national security [1]. In a recent public security bulletin, the MSS outlined the risks associated with emerging biometric technologies, including iris, facial, and fingerprint recognition, emphasizing that the misuse of such data could facilitate identity theft, surveillance, and even espionage [2].

According to the MSS, some overseas entities have been collecting iris data under the guise of cryptocurrency token distribution, incentivizing users with digital assets in exchange for highly sensitive personal information [3]. Once compromised, iris data—unlike passwords or fingerprints—cannot be changed or reset, making it a particularly dangerous form of biometric identification [4]. The agency warned that the aggregation of such data could be exploited for large-scale cyber operations, especially if accessed by foreign actors with malicious intent [5].

The MSS did not name the specific company involved but indicated that the data collection often occurs during so-called KYC processes or user verification steps [6]. Users are typically lured by the promise of free or valuable tokens, which serve as bait for data extraction [7]. The agency emphasized the irreversible nature of biometric data, urging the public to remain cautious and skeptical of any project offering tokens in return for personal identification information [8].

The warnings have sparked broader conversations about data security in the crypto space. As blockchain-based projects increasingly adopt advanced verification methods, the potential for abuse of sensitive information rises. The MSS’s statements reflect a growing recognition among Chinese authorities of the dual-edged nature of digital innovation—bringing convenience while also introducing new risks [9].

In a related development, Ethereum co-founder Vitalik Buterin has proposed a pluralistic identity model for digital verification, emphasizing privacy and inclusivity [10]. Buterin argued that rigid, one-per-person identity systems, even those using zero-knowledge proofs, could enable surveillance and exclude marginalized groups. His vision involves a decentralized verification system where multiple sources—such as governments, social platforms, or community systems—contribute to identity validation without any single entity holding dominance.

The MSS’s public advisory, posted on its official WeChat channel, urged citizens to scrutinize the legitimacy of any entity requesting biometric data and to avoid sharing such information unless absolutely necessary [11]. It also highlighted cases where foreign intelligence agencies had allegedly used facial data to infiltrate secure environments, reinforcing the gravity of the issue [12]. The agency stressed that while biometric technologies offer convenience, they also require heightened vigilance to prevent their misuse.

The warnings underscore the growing global scrutiny of biometric data collection, especially in the context of emerging technologies like blockchain. As the intersection of biometrics and cryptocurrencies continues to evolve, the potential for both innovation and exploitation remains a critical concern for regulators and users alike.

Source:

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

[2] China Warns Iris-Scanning Crypto Projects Pose National Security Risk (https://cointelegraph.com/news/china-warns-iris-scanning-crypto-projects-national-security-risk)

[3] China Warns of Security Risks From Global Iris Scan Collection Linked to Crypto Rewards (https://thecryptobasic.com/2025/08/06/china-warns-of-security-risks-from-global-iris-scan-collection-linked-to-crypto-rewards/)

[4] Urgent Alert: China Warns Against Foreign Firms Collecting Iris Information via Crypto Tokens (https://coinstats.app/news/9ea7290d021050614d384434ed75148924d3bff8048c67c2d06168e0e4fefe60_Urgent-Alert-China-Warns-Against-Foreign-Firms-Collecting-Iris-Information-via-Crypto-Tokens)

[5] Iris Scan Crypto Security Threat by China Question Worldcoin (https://www.coingabbar.com/en/crypto-currency-news/iris-scan-crypto-security-threat-by-china-question-worldcoin?srsltid=AfmBOorxc0l1TB370vA3sW1uGlUCrsICMgOusDsnyCsO_EW-GQLz3qLr)

[6] China Accuses Foreign Entity of Misusing Crypto for Iris Scanning (https://cryptonews.com/news/china-accuses-foreign-firm-misusing-crypto-surveillance-iris-scanning/)

[7] BTCUSD - Eye-scanning crypto projects pose national (https://mx.advfn.com/bolsa-de-valores/COIN/BTCUSD/crypto-news/96571524/eye-scanning-crypto-projects-pose-national-securit)

[8] China Accuses Foreign Entity of Misusing Crypto for Iris Scanning (https://www.coinlive.com/news-flash/865628)

[11] China’s Ministry of State Security (MSS) has issued a series of warnings regarding the growing risks associated with iris-scanning cryptocurrency projects, particularly those involving foreign entities (https://coinmarketcap.com/community/articles/689307f5320e3f0b1f75b890/)