Brazil blocks Worldcoin’s pay-for-data model over ethical concerns

Brazilian regulators have found that World Network, formerly Worldcoin, may have influenced user consent by offering financial incentives for collecting biometric data.

According to Brazil’s data protection watchdog, Autoridade Nacional de Proteção de Dados, this practice could compromise the validity of consent, as the financial compensation offered—such as its native ecosystem token Worldcoin (WLD)—may unduly influence individuals, particularly those in vulnerable circumstances.

For context, World Network aims to create a universal digital identity and financial system by verifying individuals as unique human beings through iris scans conducted with its proprietary “Orb” technology. 

The project, co-founded in 2019 by OpenAI CEO Sam Altman and developed by Tools for Humanity, has expanded with the goal of providing greater digital security and facilitating equitable access to resources in the age of artificial intelligence.

However, the ANPD believes the project’s approach to obtaining consent through financial incentives is problematic and has banned Tools for Humanity from offering such compensation for biometric data collection in accordance with Brazil’s data protection laws. 

These laws require consent to be free, informed, unequivocal, and explicitly given for specific purposes, especially when dealing with sensitive personal data like biometrics. 

The restrictions came into effect on Jan. 25, following an investigation initiated in November 2024, shortly after the project launched in Brazil. Regulators have also raised concerns over how World Network handles user data, particularly the irreversible nature of biometric data collection.

Even though the Sam Altman co-founded company has stressed its commitment to privacy and data security through measures like data minimization, user control over data, iris code deletion, and secure multi-party computation, that hasn’t shielded it from regulatory pressures across the globe.

Particularly, Hong Kong regulators raised similar concerns last year, calling it out for contravening local privacy laws. The Office of the Privacy Commissioner for Personal Data called Worldcoin’s data collection practices “unnecessary and excessive,” noting that it lacked transparency. 

Regulators criticized the project for failing to provide privacy notices and consent forms in Chinese and for inadequately informing participants about their rights to access and correct their data. As a result, World Network was asked to cease all operations in Hong Kong by the end of May 2024.

The project has faced similar restrictions in other regions, including Germany, Spain, and Kenya. Yet it has continued to expand its offerings with the launch of the World Chain mainnet along with upgrades for its World App and Orb devices.