China Warns Iris Scanning Crypto Projects Threat National Security

The Chinese Ministry of State Security (MSS) has issued a formal warning that foreign companies collecting users’ iris data in exchange for cryptocurrency pose a national security threat. The announcement, posted on the MSS’s WeChat account on August 6, 2025, highlighted concerns over the unauthorized collection and international transfer of biometric data, which could compromise both individual privacy and national security [1]. The agency emphasized that such data is being collected without user consent and could be exploited for cyberattacks, identity theft, or surveillance purposes [2].

The MSS did not name any specific project but described a global initiative involving iris scans in return for crypto rewards. These operations, reportedly taking place in multiple countries including Iran and Brazil, are linked to a service known as “Proof of Personhood.” Unlike decentralized platforms, this system centralizes biometric data in foreign servers, raising alarms about potential misuse [3]. Some analysts have drawn comparisons to a project previously known as Worldcoin, which has faced regulatory scrutiny in several jurisdictions, including Indonesia, where services were temporarily suspended over licensing concerns [4].

Biometric data, particularly iris scans, is considered highly sensitive due to its uniqueness and permanence. Unlike passwords or PINs, biometric identifiers cannot be changed once compromised. This makes them especially vulnerable to long-term exploitation if intercepted by malicious actors. The MSS warned that if such data is transferred overseas, it could enable foreign entities to monitor critical infrastructure or influence strategic decisions [5].

The warning reflects a broader regulatory shift in China, where authorities are increasingly scrutinizing the intersection of digital assets and data privacy. The MSS reiterated its commitment to strengthening laws governing biometric data collection and proposed new oversight mechanisms to prevent similar practices [6]. In recent months, Chinese regulators have also issued alerts against fraudulent crypto schemes, emphasizing the need for greater transparency and user caution [7].

Users are being advised to be wary of platforms offering cryptocurrency in exchange for personal or biometric data. The MSS urged citizens to carefully review the terms of service of any digital platform and to avoid transactions that lack clear data protection policies [8]. The agency’s stance aligns with growing global concerns over the ethical and security implications of biometric data usage in the blockchain and fintech sectors.

This development is likely to influence the regulatory environment for foreign tech companies operating in China. As digital currencies and decentralized technologies continue to expand, the control and ownership of biometric data are becoming central to national security strategies. The MSS’s warning signals a more assertive approach by Chinese authorities in safeguarding sensitive data and limiting foreign influence in critical technological sectors [9].

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Source:

[1] Cointelegraph - https://cointelegraph.com/news/china-warns-iris-scanning-crypto-projects-national-security-risk

[2] CoinDesk - https://www.coindesk.com/policy/2025/08/06/china-warns-worldcoin-style-iris-scanning-a-national-security-threat

[3] AInvest - https://www.ainvest.com/news/china-warns-iris-scanning-crypto-projects-threat-national-security-2508/

[4] Cryptonews - https://cryptonews.com/news/china-accuses-foreign-firm-misusing-crypto-surveillance-iris-scanning/

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

[6] AInvest - https://www.ainvest.com/news/china-warns-foreign-firms-collecting-iris-data-crypto-incentives-2508/

[7] Traders Union - https://tradersunion.com/news/cryptocurrency-news/show/419836-china-flags-iris-scanning-crypto-projects/

[8] Reddit - https://www.reddit.com/r/CryptoCurrency/comments/1mizdcm/eyescanning_crypto_projects_pose_national/

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