Worldcoin Hit With $830K Fine by South Korea Over Privacy Law Breaches

Key Insights:

• Worldcoin fined $545K for mishandling user biometric data and failing to disclose data transfers overseas as required.
• Tools for Humanity faces a $285K fine for breaching data transfer protocols and inadequate privacy disclosures in South Korea.
• Despite fines, Worldcoin continues its global expansion, with recent launches in Guatemala, Malaysia, and Poland, amid privacy concerns.

South Korea’s Personal Information Protection Commission (PIPC) has fined Worldcoin and its parent company, Tools for Humanity (TFH), 1.1 billion Korean won (approximately $830,000) for violating data privacy laws. The fines are connected to Worldcoin’s handling of personal data, particularly the collection and sharing of biometric information such as iris scans.

The PIPC determined that Worldcoin did not properly inform users about the purpose of collecting their biometric data or how long it would be stored. Additionally, until March 22, the project did not provide a Korean translation of its consent form, which is a requirement under South Korean law.

Violations and Penalties

Worldcoin, which verifies users through iris scans to create digital “World IDs,” was fined 725 million won ($545,000) for mishandling sensitive personal data and transferring it overseas without sufficient disclosure. Tools for Humanity, the company behind Worldcoin, received a separate fine of 379 million won ($285,133) for not complying with data transfer protocols.

The regulators stated that Worldcoin and TFH failed to inform users about the destination of their data and did not provide contact information for the recipients of the data, both required under South Korean law. Moreover, Worldcoin did not give users the option to request the deletion of their iris data, which further violated data protection regulations.

Outcome of the Investigation and Worldcoin’s Response

The investigation into Worldcoin’s data practices began in February 2023 and has now concluded. Despite the violations, the PIPC has not banned Worldcoin’s data collection in South Korea, allowing the company to continue operations if it addresses the identified issues. The commission emphasized that Worldcoin must comply with local privacy laws to maintain its presence in the country.

Following the decision, TFH expressed its acceptance of the PIPC’s findings. The company acknowledged that the investigation highlighted issues in its original privacy disclosures in South Korea, which have since been corrected. 

“The PIPC’s investigation, which identified weaknesses in the original disclosures provided by TFH when it initially launched in South Korea and which have since been remedied, effectively concludes that TFH’s operations, including the use of the orb for humanness verification, comply with South Korea’s Personal Information Protection Act,” the company stated in a press release.

Global Expansion Amid Regulatory Challenges

Despite facing legal scrutiny in multiple jurisdictions, Worldcoin continues to expand its global reach. Co-founded by OpenAI CEO Sam Altman and Alex Blania, the project aims to create a worldwide digital identity system using biometric data to protect against threats posed by artificial intelligence. Currently, Worldcoin has over 6.7 million verified World IDs globally and rewards users with its native cryptocurrency, WLD, for participating in iris scans using its Orb device.

The project has recently launched World ID verification in new regions, including Guatemala, Malaysia, and Poland, bringing its services to over 160 countries. Earlier this month, Worldcoin introduced Face Auth, a feature that allows users to verify their identity through a private face comparison.

Worldcoin’s native cryptocurrency, WLD, has been experiencing a positive market response. WLD is currently trading at $2.12, showing a 16% price increase in the last 24 hours. This rise has positioned it among the top gainers in the top 100 cryptocurrencies, reflecting growing interest in the project despite ongoing regulatory challenges.