Brazil Bans Worldcoin from Offering Crypto Incentives for Eye Scans

Brazil's data protection authorities have stepped in to halt Worldcoin's efforts to provide cryptocurrency incentives in exchange for biometric data. The National Data Protection Authority (ANPD) issued a ruling on January 24, 2025, ordering Tools for Humanity (TFH), the company behind Worldcoin’s iris-scanning initiative, to cease operations involving Brazilian citizens. The decision follows an investigation into the World ID project, which began in November 2024 after its launch in Brazil.

Worldcoin, now rebranded as World Network, aims to create a universal digital identity and financial ecosystem by using eye scans for biometric verification. This ambitious project was co-founded by Sam Altman, CEO of OpenAI, in 2019. Users are encouraged to have their irises scanned by a device known as the "orb" in exchange for cryptocurrency rewards. However, the ANPD has raised significant concerns about the practice, particularly about the ethics surrounding the collection of sensitive personal data.

The Brazilian data authority’s investigation found that offering financial incentives for biometric data collection could undermine the concept of informed consent. Under Brazilian law, consent for processing sensitive personal data must be freely given, unequivocal, and specific. The ANPD argued that the promise of crypto rewards could pressure vulnerable individuals into consenting to the data collection, skewing their decision-making.

Moreover, the ANPD expressed alarm over the nature of biometric data itself. Unlike other forms of personal data, iris scans are irreversible and cannot be deleted once collected, raising significant privacy concerns. This, along with the potential for exploitation of people in economically disadvantaged situations, led to the suspension of World Network's services in Brazil as of January 25, 2025.

The company behind World Network, Tools for Humanity, is no stranger to regulatory scrutiny. In December 2024, Germany's data protection authorities issued corrective measures, citing concerns over the handling of biometric data and the need for compliance with the European Union’s General Data Protection Regulation (GDPR).

In the wake of these regulatory setbacks, the value of World Network's native token, WLF, has been hit hard. The token dropped over 8% within 24 hours, falling below $2 at the time of writing. This marks an 83% decline from its all-time high of $11.74 in March 2024, signaling a sharp downturn in the project’s fortunes.

As the World Network faces growing challenges from regulators, the future of its biometric-based digital identity initiative remains uncertain. The company’s next steps will likely be closely scrutinized, both in Brazil and in other countries where the project is operating.