China’s Ministry of State Security (MSS) has publicly warned that a foreign company is using the issuance of cryptocurrency tokens as a gimmick to scan and collect user iris information worldwide and transfer the data source. The security agency said this act poses a threat to personal information security and even national security.
The information, circulated via WeChat, said that some foreign crypto projects lure users into using iris scans for tokens. The scanned biometrics are transferred to another country, causing red flags for personal privacy and national security. China’s security agency believes this could be used for espionage and other infiltrations.
Reasons the State Security Agency Is Giving
Unlike passwords or PINs, iris security can’t be restored if compromised. MSS warns of grave security consequences if this highly sensitive pattern is misused. Furthermore, China thinks that foreign intelligence could weaponize this security scan via deepfakes or biometric spoofing.
Although the MSS didn’t specify which project is behind the warning, experts believe that the description matches Sam Altman’s digital identity program, World. The platform awards users Worldcoin (WLD) in exchange for iris scans taken via the Orb devices. World has gone viral in a few months of launch, available in over 160 countries globally.
China isn’t the only country that has issued such a security warning. Privacy regulators in Germany, France, and Kenya have alerted the public about the iris scan and scrutinized the project for such an initiative. Public figures, such as Vitalik Buterin, have spoken against the digital identity propositions, saying it puts pseudonymity at risk. This is the first time iris-based crypto identity collection has been labelled by China as a national security.
Why This is a Concern for China
China is very particular about security, having one of the stringent cybersecurity laws globally. The MSS alert further justifies how cautious the Chinese government is regarding security. The security agency cited several cases where stolen biometric data was used for espionage. The security agency warns that iris data leakage could be used to forge real identities to infiltrate secure environments.
The MSS emphasized that cross-border transfer of data raises fears of foreign actors obtaining data with little oversight. This iris data, if compromised, can’t be changed, making the consequences of identity theft irreversible. Some crypto users have already shared their displeasure and fears, with many saying it might be a scam. Others feel the so-called World project is exploiting people for a mere $50.
Still, the MSS refuses to mention the project engaging in the collection of user data via iris scans. However, the agency reinforces sovereignty, explaining that foreign entities engaging in data collection in exchange for tokens may conflict with national data frameworks. From the MSS perspective, token-based biometric collection is not just a privacy issue but a threat to national security.
What’s Next for Crypto-based Biometric Collection Systems?
MSS’s warnings show that even identity techs are not free from regulatory agencies. Systems like the World project blur the lines between voluntary participation and surveillance. Questions like consent and data permanence often arise when these systems are used.
Therefore, any privacy-based project or startup that relies on biometric verification must prioritize consent, transparency, and secure data storage. In regions like Europe and China, where data protection laws are strict, privacy-based projects must act accordingly or risk lawsuits.
For users, the warnings from the MSS are a wake-up call for them to scrutinize any crypto project offering tokens in exchange for identity data. Is it worth it to give out a piece of your identity for tokens? For policymakers, they must understand the importance of incorporating identity protocols into crypto regulations, especially as frameworks like the GENIUS Act and MiCA are shaping digital ID rules. This creates an oversight that ensures transparency, user control, and compliance.
