Brazil’s National Data Protection Authority (ANPD) has ordered Tools for Humanity (TFH), the company behind the biometric-focused Worldcoin project, to stop offering cryptocurrency or financial compensation in exchange for biometric data. The directive took effect on January 25, 2025, following an investigation initiated in November 2024.
Concerns Over Consent and Biometric Privacy
Worldcoin, co-founded in 2019 by OpenAI CEO Sam Altman, uses iris-scanning technology to establish a global digital identity network known as World ID. Participants have been incentivized with financial rewards, including cryptocurrency, in exchange for their biometric data collected via a device called the “Orb.”
However, the ANPD found that these incentives could compromise the validity of user consent. Under Brazil’s General Data Protection Law (LGPD), consent for processing sensitive data like biometric information must be free, informed, unequivocal, and specifically given for defined purposes.
“The General Coordination of Taxation understood that the granting of pecuniary consideration by the company, through the offer of cryptocurrencies, may hinder the obtaining of the consent of the holder of personal data” the ANPD stated. The agency also highlighted the irreversible nature of biometric data collection and the inability to delete such data once submitted, raising serious privacy concerns.
Global Scrutiny and Financial Impact on Worldcoin
This decision reflects growing global scrutiny of biometric data collection practices. In December 2024, Germany’s data protection authority imposed corrective measures on Worldcoin for failing to comply with the European Union’s General Data Protection Regulations (GDPR).
The suspension has also impacted Worldcoin’s native token, WLD. Over the past 24 hours, the token’s value has dropped more than 8%, trading below $2. According to CoinGecko, WLD has declined 83% from its March 2024 all-time high of $11.74.
Worldcoin’s Privacy Initiatives and Future Plans
Despite regulatory challenges, Worldcoin has sought to address privacy concerns. It introduced initiatives such as “Personal Custody,” which allows users to have greater control over their biometric data. The company is also preparing to launch World Chain, a Layer 2 network designed for scalability and efficiency, with a mainnet launch anticipated later this year.
In a statement, the ANPD emphasized the importance of ensuring that financial incentives do not undermine the protection of sensitive personal data. TFH has been directed to comply with Brazilian law by halting these practices and clearly identifying its data processing responsibilities on its website.
This decision signals a shift in regulatory oversight over biometric technologies, particularly those tied to financial incentives, and may have broader implications for similar projects worldwide.
