The controversial Worldcoin project has faced yet another setback. Hong Kong’s privacy regulator, the Office of the Privacy Commissioner for Personal Data (PCPD), ordered the Worldcoin Foundation to halt all its operations in the region, citing that its practices violate local privacy regulations.

The PCPD released a statement this week revealing that Worldcoin had collected facial and iris biometric data from at least 8,302 individuals during its Hong Kong operations.

After conducting 10 covert inspections at six Worldcoin locations in December 2023 and January 2024, the agency determined that such extensive collection of biometric information was “unnecessary and excessive.” It added that such actions violated the principles of data protection under Hong Kong’s privacy laws.

Verifying Humanness: A Conundrum

Hong Kong’s PCPD pointed out that Worldcoin would retain personal data for a maximum of 10 years to train AI models for the user verification process, a period the agency believes would be “too long.” The PCPD also said that there are “less privacy-intrusive” alternatives to prove humanness.

It is important to note that Hong Kong isn’t the only region that has objected to Worldcoin and its controversial iris-scanning orbs. In fact, the Sam Altman-headed project has encountered difficulties in multiple regions regarding its digital ID collection. In March, South Korea initiated an investigation following complaints about the project’s gathering of personal information. Similarly, Spain and Portugal have instructed the project to cease collecting users’ biometric data.

Unlike privacy advocates who had, time and again, weighed in that Worldcoin is not a path to attain proof-of-personhood, Billy Luedtke, the Founder and  CEO of a decentralized identity startup ‘Intuition’ commended the project.

While highlighting the growing importance of verifying if information comes from human sources amidst AI’s rapid advancements, Luedtke claimed that Worldcoin and other decentralized identity projects “are actively addressing the challenge, providing tools to help individuals assert their humanity in an online world where distinguishing human presence is growing more complex.”

In a statement to CryptoPotato, the exec said,

“While concerns around data privacy remain valid, the internet’s usability suffers due to an overflow of non-human activity, trust deficits, and fragmented identity landscapes. Encouraging dialogues between governments and industries, alongside innovations in privacy-preserving technologies like personal custody, offer hope for ongoing progress and innovation in this field.”

What Does Hong Kong’s Rejection of Worldcoin Mean For Crypto?

Jerry Li, Co-Founder and CEO of Artela Network, interprets Hong Kong’s halt on Worldcoin’s operations as indicative of its stringent and proactive stance on crypto regulation, particularly concerning data privacy and biometric data collection.

This strict approach is likely to set a precedent in the APAC region, pushing other crypto projects to prioritize data privacy and adherence to local regulations, Li said in a statement to CryptoPotato.

However, the exec said that this move doesn’t imply that Hong Kong is hostile towards cryptocurrencies.

“Stopping Worldcoin’s operations doesn’t necessarily imply that Hong Kong is unfriendly towards cryptocurrencies. Although Hong Kong enforces strict data privacy regulations, it continues to support the crypto industry through clear regulations, government initiatives, robust financial infrastructure, and industry backing.”

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