Brazil Upholds Ban on Cryptocurrency Payments for World ID Due to Privacy Concerns

The ANDP, Brazil’s data protection agency, has reaffirmed its ban on cryptocurrency payments linked to the World ID project due to privacy issues. This decision prevents Tools For Humanity from compensating users for iris scans necessary for creating World IDs. The company could face fines should it continue data collection. Digital identity solutions that prioritize privacy are emerging in response to the growing concerns around biometric data.

Brazil’s National Data Protection Authority (ANDP) has upheld its ban on cryptocurrency compensation for users participating in the World ID project, citing serious concerns regarding user privacy. On March 25, ANDP denied a petition from Tools For Humanity to revisit its decision, thereby maintaining the prohibition on financial compensation for biometric data collected through iris scans in the country.

The ANDP specified that it would “maintain the suspension of the granting of financial compensation, in the form of cryptocurrency (Worldcoin – WLD) or in any other format,” linked to any World ID that involves iris scans from users in Brazil. The company could incur daily penalties of 50,000 Brazilian reais (approximately $8,800) should it continue its data collection activities.

This investigation into World, previously known as Worldcoin, commenced in November of last year due to concerns regarding financial incentives potentially distorting user consent regarding sensitive biometric data. The controversial World ID system operates by allowing users to undergo iris scans that yield a unique digital passport for online verification.

As previously reported by Cointelegraph, Tools for Humanity was directed to cease operations in Brazil as of January 25. The challenges faced by World ID in Brazil, however, contrast with the growing adoption of digital identity initiatives globally, driven by the risks posed by AI deepfakes and Sybil attacks.

The prevalence of bots and AI-generated accounts is further complicating the landscape of online interactions, with estimates suggesting that around 15% of accounts on platforms like X are bots. Furthermore, research from Chainalysis has indicated that generative AI is making cryptocurrency scams increasingly lucrative by facilitating the generation of fraudulent identities.

In light of these challenges, some enterprises are working to develop digital identity solutions that respect privacy and regulatory guidelines. For instance, Billions Network recently launched a digital identity platform that avoids the need for biometric data, utilizing zero-knowledge verification technology called Circom, which has successfully undergone testing by major banks such as HSBC and Deutsche Bank.

In conclusion, Brazil’s decision to uphold the ban on cryptocurrency compensation linked to the World ID project underscores significant privacy concerns regarding biometric data collection. As digital identification technology evolves amid the challenges posed by AI and privacy regulations, alternative solutions that do not rely on sensitive data are gaining traction in the market. The continued scrutiny by regulatory bodies reflects a growing need to balance innovation with user privacy and protection.

Original Source: cointelegraph.com