Benzinga - The Worldcoin project (WLD), led by OpenAI CEO Sam Altman, has been under investigation by German and French data protection authorities due to concerns surrounding its large-scale handling of sensitive biometric data.
Worldcoin, which debuted recently, necessitates users to provide iris scans in exchange for a digital ID and, in some regions, free cryptocurrency.
This initiative is part of the project's ambition to establish a new "identity and financial network".
The Bavarian State Office for Data Protection Supervision initiated the investigation into Worldcoin in late 2022 due to concerns that the project aims to process "sensitive data at a very large scale" using novel technology, said Michael Will, the president of the regulator, according to a Reuters report.
Will further explained that the Bavarian state regulator is the primary authority investigating Worldcoin under the European Union's data protection regulations, as Tools For Humanity, the company backing Worldcoin operates a German subsidiary.
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Simultaneously, the French data protection regulator, CNIL, has also expressed concerns over Worldcoin's practices.
A CNIL spokesperson questioned the legality of Worldcoin's data collection and preservation methods, particularly its practice of scanning retinas to prevent individuals from claiming crypto rewards more than once.
The CNIL is supporting the Bavarian privacy regulators in their investigation.
Will voiced concerns about the potential risks, including whether users have granted explicit consent for their highly-sensitive biometric data to be processed based on "sufficient and clear" information.
He stated, "These technologies are at first sight neither established nor well analyzed for the specific core purpose of the processing in the field of transferring financial information."
Worldcoin's website states that its network is "privacy-preserving," asserting that personal data is stored in an encrypted format.
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