South Korea Fines Worldcoin $829,000 for Privacy Violations

Key Takeaways

• Among the violations, PIPC highlighted that Worldcoin did not properly inform users of the purpose of collecting their biometric data
•  As per PPIC, nearly 100,000 South Koreans downloaded Worldcoin’s app, with 30,000 of those users having their iris scans collected for verification purposes

South Korea’s Personal Information Protection Commission (PIPC) has fined the Worldcoin Foundation and its partner company, Tools For Humanity (TFH), 1.1 billion Korean won ($829,000) for breaching the nation’s personal information protection laws. The fine was issued on September 25 after an investigation into Worldcoin’s collection and handling of biometric data, specifically iris scans, from South Korean citizens.

The investigation began in February after complaints emerged that Worldcoin was collecting biometric data in exchange for cryptocurrency. According to PIPC, nearly 100,000 South Koreans downloaded Worldcoin’s app, with 30,000 of those users having their iris scans collected for verification purposes.

However, the commission found that the company had not provided a legal basis for collecting such sensitive information and failed to meet several requirements outlined in South Korea’s Personal Information Protection Act (PIPA).

Among the violations, PIPC highlighted that Worldcoin did not properly inform users of the purpose of collecting their biometric data, the duration it would be retained, or that the data would be transferred overseas. South Korean law mandates that users must be notified about where their data is being sent and the entities responsible for handling it. Additionally, the company had no clear procedures in place for users to request the deletion of their personal data.

Tools For Humanity was also fined 379 million won ($285,133) for its role in transferring data abroad without appropriate safeguards and failing to ensure the protection of users under the age of 14. The investigation also revealed that Worldcoin’s age verification system was insufficient, allowing children to sign up for the app without adequate oversight until April 2024.

Despite the fine, the PIPC did not prohibit Worldcoin from continuing its operations in South Korea, provided that the necessary changes are made to comply with the law.

Worldcoin, which aims to verify users’ identities through iris scans in exchange for its WLD cryptocurrency, operates globally with over 6.7 million verified users across 160 countries.

In response to the ruling, Tools For Humanity welcomed the decision, stating that the findings were the result of ongoing discussions with South Korean regulators. The company acknowledged that while their initial disclosures to users in South Korea were incomplete, they have since been updated to meet the country’s legal standards.

Damien Kieran, chief privacy officer at TFH, expressed appreciation for the PIPC’s review, saying, “We are pleased with the findings, which affirm our commitment to user privacy and data protection. This decision shows that innovation can be balanced with regulatory compliance.”

Despite the regulatory hurdles, the project’s WLD token surged 35% this week, from $1.60 on Sept. 19 to $2.16 on Sept. 26.

Worldcoin, launched in July 2023, requires users to give their iris scans in exchange for a digital ID and, in some countries, free crypto as part of plans to create a new “identity and financial network”.Worldcoin is a project under Tools For Humanity, a company co-founded by Blania and OpenAI CEO Sam Altman. 

Worldcoin scans people’s eyeballs using the Orb device which is a reflective metal ball that records information about a person’s iris in the form of a cryptographic code. Everyone who passes the scan will participate in periodic giveaways of WLD tokens.

The project has however received criticism from cyber security campaigners from Argentina to Germany over the collection, storage and use of personal data.