France, Germany: European Authorities Investigating Worldcoin

Sam Altman’s Worldcoin project, which was launched last week, asks users to provide their iris scans in exchange for a digital identity card and, in some countries, free cryptocurrencies as part of projects aiming to create a new “identity and financial network.”

However, the Worldcoin project is already raising concerns among data protection authorities in the European Union.

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Germany Opens Worldcoin Investigation

The Bavarian Office for Data Protection Control started investigating Worldcoin in November 2022 because it feared that the project might seek to process “highly sensitive data on a very large scale” using new technologies, said Michael Will, the chairman of the state regulatory body, in comments sent by email to Reuters on Friday.

Mr. Will stated that the Bavarian state regulator was the main authority responsible for investigating Worldcoin under the European Union data protection rules since Tools For Humanity, the company behind Worldcoin, has a German subsidiary in the country.

“These technologies are not, at first sight, established or well-analyzed for the specific primary purpose of processing in the field of financial information transfer,” said Mr. Will.

Worldcoin Poses Several Risks, Says German Authority

This poses several risks, including whether users have given explicit consent for processing their highly-sensitive biometric data based on “sufficient and clear” information, according to Mr. Will.

Worldcoin has yet to respond to a request for comment. Its website describes its network as “privacy-preserving” and indicates that personal data is encrypted.

Worldcoin Foundation Claims Compliance With EU Regulations

The Worldcoin Foundation, an entity based in the Cayman Islands, stated in an email to Reuters last week that it complies with EU rules and would continue to cooperate with governing bodies requesting information about its privacy and data protection practices.

Since the project’s launch, people have been getting their faces scanned by a “glowing and spherical orb” at registration sites worldwide, including France, Germany, and Spain. Worldcoin claims that 2.1 million people have signed up, mainly during a trial period over the past two years.

Privacy Advocates Are Concerned

Privacy advocates have long been concerned about the large-scale collection and storage of biometric data, which could enhance surveillance or target certain demographic groups.

Several European regulatory authorities consider Worldcoin a matter of interest and have requested information, added Mr. Will.

France Launches Its Own Worldcoin Investigation

Also having its concerns over Worldcoin, CNIL (the French Data Protection Authority) confirmed that it had opened an investigation on Friday, July 28, into the token.

“The legality of data collection appears doubtful, as well as the conditions for storing biometric data,” points out the French authority, which explains that it has transmitted its questions to its Bavarian counterpart. 

The Future of Worldcoin and Europe

In Europe, the Worldcoin project has been launched in four countries: France, Germany, Spain, and the United Kingdom. In addition to France and Germany, the ICO (UK Information Commissioner’s Office), has also taken up the case.

The cryptocurrency is available in about twenty countries worldwide but not in the United States, where the authorities closely monitor crypto-assets.

What European Regulators Should Look At

Three main elements of the Worldcoin project should be examined by European regulators.

No Impact Assessment

First, the absence of an impact assessment on data protection, which is mandatory within the European Union and the UK before launching any new product “likely to result in a high risk to rights and freedoms.”

This analysis is required for all companies with an office on the continent. This is the case for the startup Tools for Humanity, which developed the token and its associated application. However, the company claims not to be involved in data management. This task falls under the responsibility of the Worldcoin Foundation, based in the Cayman Islands, outside the European jurisdiction.

No Data Deletion

The second element concerns the legality of iris scanning. As it is biometric data, its collection is subject to even stricter rules under the GDPR. It must be obtained through “informed” and “freely given” consent.

This means that users must have access to several pieces of information, including the identity of the data controller and the purposes pursued. Users should also be able to refuse the collection of this data without losing access to the service – something that doesn’t seem to be the case with Worldcoin.

Data Export

Finally, European authorities will examine what happens once Worldcoin operators perform the iris scan. If the data is sent outside the European Union, the company that collected it must ensure that the local legislation has been recognized as “adequate by the European Commission.” Furthermore, the GDPR allows European users to request the deletion of their personal data, which is not currently possible with the Worldcoin project.

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(Featured image by AcatXIo via Pixabay)

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