In a dramatic turn of events, Worldcoin—the controversial iris-scanning digital ID project—is facing a major setback in Brazil. The country’s data protection watchdog has ordered the company behind the biometric tech to halt its crypto-based incentives, effectively stopping them from offering financial rewards for eye scans. Here’s what happened, why it matters, and what this means for the future of biometric data in the world of crypto.
Brazil Cracks Down: No Crypto for Eye Scans
On January 24, Brazil’s National Data Protection Authority (ANPD) announced that Tools for Humanity (TFH)—the company behind Worldcoin’s World ID project—must stop offering cryptocurrency incentives to Brazilian citizens, effective the very next day, January 25. This was the result of an investigation launched back in November after World ID made its debut in Brazil.
Worldcoin’s project, which involves scanning people’s irises to create a universal digital identity, has already sparked serious concerns about privacy, consent, and data protection. The core idea behind the project is to allow users to verify their identity using their iris, and in exchange, receive crypto tokens. But the Brazilian authorities weren’t convinced that this approach respected user consent or protected sensitive data.
Why Brazil Said “No Thanks” to Crypto and Biometrics
The ANPD’s enforcement division pointed out that offering crypto incentives for biometric data collection could potentially undermine the authenticity of user consent. Why? Because, under Brazilian law, consent for processing sensitive personal data—like biometric data—must be free, informed, and unequivocal. In other words, it must be entirely voluntary and not influenced by financial incentives.
The authorities raised alarms that offering crypto rewards might push people—especially those in vulnerable situations—into making decisions they wouldn’t otherwise make, just for the sake of a quick financial payout. And that’s not all. There’s also the issue of the irreversible nature of biometric data collection. Once the data is collected, it can’t be erased, making it even more critical to ensure that consent is given freely and without external pressure.
The Global Ripple: Worldcoin Faces Backlash Beyond Brazil
Brazil isn’t the first country to take a hard look at Worldcoin’s data practices. Back in December, Germany’s data protection authority also took action, issuing corrective measures regarding the project’s handling of biometric data. Germany ordered Worldcoin to implement steps to comply with the EU’s General Data Protection Regulation (GDPR), which is one of the strictest data protection frameworks in the world.
In short, Worldcoin is facing growing global scrutiny over its biometric collection practices, especially around how data is stored, used, and potentially exploited. With Brazil’s new ruling, the project is now under a microscope in two major markets, and other countries may follow suit if concerns about privacy and consent continue to rise.
A Setback for Worldcoin: Token Price Takes a Hit
The backlash isn’t just regulatory—Worldcoin’s native token, WLF, is also feeling the pain. Since the announcement of Brazil’s ban, the token has dropped more than 8% in just 24 hours, falling below the $2 mark. In fact, WLF has now dropped an astonishing 83% from its March 2023 all-time high of $11.74. This price crash is just the latest sign that Worldcoin’s push into the crypto and biometric space might not be as smooth as its founders hoped.
What’s Next for Worldcoin and Biometric Crypto?
So, what does the future hold for Worldcoin and similar projects? The Brazilian ban is a significant blow to Worldcoin’s ambitions of becoming a universal digital identity and financial network. As more countries around the world tighten their data protection laws, it’s likely that biometric-based projects like Worldcoin will face even more regulatory hurdles.
But that doesn’t mean Worldcoin is down for the count. The company is likely to push back against these rulings, and it may try to make changes to its approach to ensure compliance with local data protection laws. However, for many privacy advocates and skeptics, this will likely feel like more evidence that collecting and monetizing biometric data—especially in exchange for financial incentives—is a slippery slope.
At the same time, the rise of biometric-based identification systems and crypto is likely to continue to evolve in the coming years. As the tech improves and more countries create regulations around digital identity and data protection, we may see new models emerge that balance the convenience of biometric identification with the need for privacy and security.
For now, Worldcoin’s dreams of mass adoption in Brazil are on pause, and its crypto token is taking a hit. But if the tech world has learned anything, it’s that controversial innovations often come with a rollercoaster ride. Will Worldcoin adapt and bounce back, or will this setback prove to be a major stumbling block? Only time will tell.
