On August 6, 2025, a severe warning from China's highest security agency dropped a heavy bombshell in the global cryptocurrency and technology sectors. The Ministry of State Security (MSS) published a statement via its official social media account, harshly pointing out that certain activities that use 'free cryptocurrency' as bait to scan and collect users' iris and other biometric data on a large scale pose a serious threat to personal information security and even national security in China.
Although the announcement did not directly mention any company names, the operational model described—scanning irises in exchange for digital tokens—highly aligns with the cryptocurrency project 'Worldcoin', co-founded by OpenAI CEO Sam Altman. This unnamed 'named' warning is widely interpreted as the most explicit and severe signal from the Chinese government to the biometric data encryption projects represented by Worldcoin.
Unnamed warning
In its announcement, the Chinese Ministry of State Security detailed this potential threat. The announcement pointed out that a 'certain overseas company' is using the issuance of cryptocurrency as a pretext to scan and collect users' iris information globally and then transfer this extremely sensitive biometric data to unknown locations.
The Ministry of State Security emphasizes that biometric features such as facial recognition, fingerprints, and irises are unique, immutable, and irreproducible, making them extremely important personal identity identifiers in the digital age. Once this data is leaked or misused, the consequences could be dire. Malicious actors may use this information for identity theft, financial fraud, or even illegal surveillance.
By elevating this issue to the level of national security, the Ministry of State Security has expressed deeper concerns. The announcement mentioned that there is evidence that foreign intelligence agencies have been attempting to illegally collect biometric data from other countries and use this data to forge identities to enter sensitive areas or conduct espionage activities. Thus, the large-scale and indiscriminate transmission of citizens' biometric data overseas undoubtedly poses a significant hidden danger to national security.
Therefore, the Ministry of State Security urges Chinese citizens to remain highly vigilant and not to sell their precious biometric information for small profits. It also encourages the public to report any suspicious data collection activities to national security agencies immediately.
Global Controversy of Worldcoin
Despite the Chinese government's restraint in diplomatic language, global media and analysts have no doubt that this warning is aimed directly at Worldcoin.
Since its inception, the Worldcoin project has been accompanied by huge controversy. Its core idea is to establish a reliable 'Proof of Humanity' system in a future soon to be filled with General Artificial Intelligence (AGI), to effectively distinguish real humans from AI robots. To achieve this goal, the project has designed a spherical device called 'Orb' that sets up scanning points around the world, allowing users who are willing to have their irises scanned by the Orb to receive a Worldcoin (WLD) token as a reward.
This radical model, while attracting a large number of users from over 160 countries to Worldcoin in a short time, has also triggered a global regulatory storm and privacy concerns. China is not the first country to raise a red flag about it.
South Korea: In 2024, South Korea's Personal Information Protection Commission (PIPC) imposed a fine of approximately $830,000 on Worldcoin and its parent company Tools For Humanity (TFH) for violating data protection laws.
Multiple countries have banned: Several countries and regions, including Kenya, Brazil, Spain, Portugal, and Hong Kong, have subsequently banned or halted Worldcoin's iris scanning activities.
Widespread scrutiny: Regulatory agencies in countries such as Germany, Colombia, and Indonesia have also launched in-depth investigations into Worldcoin's data protection compliance and privacy policy transparency.
The warning from China's Ministry of State Security is undoubtedly the most severe one so far in this global regulatory storm. It is no longer just from the perspective of personal privacy protection but directly questions the fundamental model of such projects from the high ground of 'national security'.
It is noteworthy that the warning from the Ministry of State Security is not unfounded, as it is supported by China's gradually established and increasingly improved data security legal system in recent years.
China has successively introduced and implemented a series of significant laws, including the Data Security Law, Cybersecurity Law, and Personal Information Protection Law. These regulations delineate clear and strict legal boundaries for the collection, storage, use, and cross-border transfer of sensitive information, particularly biometric data such as facial and iris recognition. Any individual or organization, regardless of their registration location, must strictly comply with these regulations when processing the personal information of Chinese citizens within China.
This means that the warning from the Ministry of State Security is not only a verbal reminder but also a serious declaration against potential illegal activities. Any attempts to carry out projects similar to the Worldcoin model within China will face severe sanctions under Chinese law.
Web3 Idealism and National Data Sovereignty
China's national-level security alert regarding Worldcoin-style projects marks a fierce collision between an emerging and highly controversial business model in the Web3 field and the strong will of national sovereignty.
On one hand, there are Web3 idealists represented by Worldcoin. They attempt to solve grand problems that the future world may face (such as distinguishing humans from machines) using decentralized technological solutions, and adhere to a borderless model of global governance driven by code and consensus.
On the other hand, there are countries represented by China that increasingly value data sovereignty. In their view, citizens' biometric data is one of the core strategic resources of the country, and its security and control must not be allowed to fall into the hands of any overseas entities not bound by their national laws.
This incident serves as a loud alarm for all projects attempting to bundle sensitive personal data with crypto assets. It clearly indicates that any technological innovation, no matter how grand its vision, will face strong countermeasures from state mechanisms once it touches the red line of 'data sovereignty'. In the digital age, the struggle for control over data has become a new battlefield for great power competition.
