Hong Kong’s privacy watchdog searched six offices of cryptocurrency company Worldcoin on Wednesday over concerns it is using biometric information in its operations. The regulators said they were seeking information from the startup on how it is using the iris scanning devices to enable use of its cryptocurrency. 

No public complaints were filed with the Office for the Privacy Commissioner for Personal Data (PCPD), but warrants were secured for the search of several locations, among them an office in Cyberport, according to local news reports. Cyberport has served as a startup haven for a number of years as it attempts to lure startups to the territory.

The PCPD also entered the project’s offices in Yau Ma Tei, Kwun Tong, Wan Chai, Central, and Causeway Bay 

It is unclear if any data, documents or equipment were seized. 

"Worldcoin was established to help create access and participation in the global digital economy while preserving privacy,” a spokesperson for the Worldcoin Foundation, who declined to identify themselves, said in an emailed statement. “Worldcoin does not seek to know who a person is, just that they are human and unique. As such, any information used to verify unique humanness is promptly deleted by default.”

The spokesperson said Worldcoin welcomes regulators who want to learn about their operations. “The Worldcoin Foundation is committed to full compliance with all relevant laws and regulations governing the processing of personal data in the markets where Worldcoin operates. This includes, but is not limited to, The Hong Kong Personal Data (Privacy) Ordinance.”

PCPD press secretary Eric Lam confirmed that it had entered “six premises with court warrants for the purposes of investigation. The PCPD requested the relevant parties to furnish required documents and information. As the PCPD has commenced an investigation, the PCPD would not make any further comment at this stage,” he said.

A request for comment from Cyberport was not immediately returned. 

This appears to be the first time that a Hong Kong regulator has taken an enforcement or investigative approach to a cryptocurrency company, though it has distributed privacy information to consumers about fintech for a number of years. 

Worldcoin uses what it calls “proof-of-personhood” technology, which is an orb that scans the eye of consumers to differentiate whether the buyer or seller of a token is a human or a robot. The user is given a global information number and has their biometrics attached to that numerical identity.  

Regulators stated on Wednesday that the PCPD had “questions” about how the Worldcoin iris scanning technology was working and wanted to determine if Worldcoin was using the appropriate steps to notify consumers of how their personal data was being used. 

This type of move appears to be unprecedented in the operations of the PCPD, which was established several years ago to help consumers navigate the way their personal information is used by Internet firms and telecommunications companies, as well as brands who use digital media to interact with consumers. 

In a typical case, the PCPD would investigate or take action after complaints are made. Such proactive action is rare. However, scrutiny over cryptocurrency has increased in Hong Kong in recent months. 

Hong Kong regulators moved aggressively last year to eliminate fraud in the cryptocurrency space by drafting new legislation to create oversight on crypto trading. It is now illegal for a company to run a cryptocurrency exchange in the city unless they have received approval and a license from the Hong Kong Securities and Futures Commission. Only two licenses have been allocated, and at least six other companies, including a subsidiary of OKX, are waiting to have their licenses approved. 

After consultation with the public, Hong Kong has also relaxed some rules, hoping to offer retail investors more latitude in trading options. This comes as the city’s traditional finance stock index, the HSI, has hit lows not seen since 1997, when the city was handed back to the Chinese from the British. 

Hong Kong finance regulators say that they want to make Hong Kong a global hub for cryptocurrency innovation to draw more money to the jurisdiction. At the same time, they have severely limited the types of operations that can be launched within the financial system. 

For a little over a year, the SFC has allowed the trading of ETFs related to Bitcoin and Ethereum, but has limited those trades to institutional clients. 

lead image:Lo Dik-fan, senior personal data officer for the Office of the Privacy Commissioner for Personal Data speaking at a press conference after the searches, photo courtesy of PCPD