Gushiken Yona
A bold vision to create a universal digital identity system hits a snag, as Worldcoin, the ambitious project spearheaded by OpenAI co-founder Sam Altman, has been slapped with a hefty fine from South Korea’s Personal Information Protection Commission (PIPC).
The commission, the country’s watchdog for data privacy, levied a total of 1.14 billion won (roughly $850,000 USD) in fines, corrective orders, and improvement recommendations against Worldcoin Foundation and its associated company, Tools for Humanity Corporation (TFH), for violations of the Personal Information Protection Act (PIPA).
The controversy began earlier this year, fueled by a flurry of complaints and media reports, centering on the crypto project’s practice of collecting biometric data, specifically iris scans, from users in exchange for their virtual currency. The PIPC’s investigation revealed that the Worldcoin Foundation, responsible for processing personal information, had indeed collected iris scans from Korean users without a clear legal basis or sufficient notice.
“Worldcoin Foundation took a photo of the data subject’s iris using Orb and used it to create an iris code, but did not properly notify domestic data subjects of the ‘purpose of collection and use’ and ‘retention and use period’ as stipulated in the protection law,” PIPC noted, underlining the lack of transparency.
The commission also emphasized the importance of safeguarding this data, noting that the iris code is “sensitive information (biometric information) that can uniquely identify an individual and cannot be changed.” The PIPC ultimately concluded that Worldcoin had violated the PIPA, which requires separate consent and safety measures for processing such information.
Adding to the violations, the investigation determined that the Worldcoin Foundation transferred this sensitive data overseas, primarily to Germany, without providing sufficient notice to the individuals involved. This, too, contravened the PIPA’s requirements for cross-border data transfer.
Beyond these core concerns, the PIPC also noted the lack of a robust deletion function for iris scans and inadequate age verification procedures for minors within Worldcoin’s World App.
The Shib Daily has reached out to both Worldcoin and Tools for Humanity for comment on the hefty fine and corrective orders issued by the PIPC. We’ll update the story as soon as we hear back from either company.
The PIPC’s decision to impose fines on both Worldcoin Foundation and TFH underscored the seriousness of the violations. The commission also issued a series of corrective orders to Worldcoin.
The PIPC’s action highlighted the growing focus on data protection in the age of artificial intelligence and the digital economy. This recent development in South Korea serves as a stark reminder that even innovative technologies like blockchain, with their global reach, must navigate the complex landscape of data privacy and security regulations.
While Worldcoin aims to create a universal digital identity system, its ambitions have now been met with a significant hurdle, forcing the company to reassess its approach and prioritize user rights amidst its expansion.
In response to the PIPC’s findings, Tools for Humanity, the technology company behind Worldcoin, released a statement reaffirming its commitment to user privacy and data protection. The company acknowledged the PIPC’s findings and expressed its willingness to engage in ongoing dialogue with the commission.
“We are gratified by the PIPC’s findings, which validate our unwavering commitment to user privacy and data protection,” said Damien Kieran, Chief Privacy Officer of TFH. “This outcome is the result of months of constructive dialogue and demonstrates that innovation and regulatory compliance can go hand in hand.”
This story has been updated to include a statement from Tools for Humanity, the technology company behind Worldcoin, reaffirming its commitment to user privacy and data protection.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
