Rita Dfouni
- China’s top security agency warns iris-scanning crypto projects may be exploited for foreign surveillance.
- Worldcoin’s iris-based ID system faces indirect scrutiny despite not operating in China.
- Vitalik Buterin proposes multi-source identity frameworks to avoid surveillance and protect user privacy.
China’s Ministry of State Security (MSS) has issued a rare public bulletin warning against crypto-linked projects that collect biometric data, including iris scans, stating they may pose significant threats to both personal privacy and national security.
The warning, published Wednesday, highlights the increasing adoption of high-precision biometric methods such as facial recognition, fingerprints, and iris scans by digital asset firms. The MSS cited one unnamed “overseas company” that allegedly scanned and collected iris data under the pretense of issuing cryptocurrency tokens. The data, according to the bulletin, was then transferred outside of China, raising major intelligence and security concerns.
While the agency did not name the company directly, the description closely matches the operations of Worldcoin, a global iris-scanning crypto project co-founded by OpenAI and who’s CEO is Sam Altman. Worldcoin offers its WLD token in exchange for iris scans and according to there website they operate in over 160 countries excluding China.
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Biometric data risks flagged
The MSS emphasized that iris recognition is often used in sensitive sectors due to its accuracy, but once compromised, the data is “irreversible and cannot be changed.” Improper storage or misuse of this information could result in leaks that endanger both personal and national security.
Authorities also cited real-world examples of foreign intelligence agencies manipulating facial recognition data to carry out surveillance and infiltration. The bulletin urged caution when submitting biometric data, even if the process appears harmless or tied to technological benefits.
Vitalik Buterin proposes pluralistic digital identity
In response to similar concerns around identity, Ethereum co-founder Vitalik Buterin proposed a pluralistic digital ID framework in June. His model aims to address privacy issues in on-chain identity verification systems, especially those enforcing rigid one-ID-per-person rules.
Buterin warned that requiring a single, centralized ID risks exposing users to surveillance by governments and employers. He also rejected “proof of wealth” as a fair identity method, saying it would disproportionately empower the wealthy while excluding marginalized communities.
His solution involves verifying identities using multiple decentralized sources such as governments, social groups, or community validators without allowing any one party to dominate. The approach is meant to preserve user privacy while enabling scalable digital identity infrastructure for decentralized systems.
