Brazil’s National Data Protection Authority (ANPD) has ordered Tools for Humanity (TFH), the company behind the Worldcoin project, to cease offering cryptocurrency in exchange for biometric data. This decision, effective January 25, follows an investigation into the World ID project, which launched in Brazil in November.

The ANPD determined that providing financial rewards for biometric data, such as eye scans, undermines the validity of user consent. Under Brazilian law, consent for sensitive data collection must be voluntary, informed, and explicitly given for specific purposes. The watchdog expressed concerns that financial incentives could exploit individuals in vulnerable situations.

Worldcoin, co-founded in 2019 by OpenAI CEO Sam Altman, uses iris-scanning devices called “orbs” to create a universal digital identity and financial network. However, critics argue that the irreversible collection of sensitive biometric data poses serious privacy risks. The ANPD emphasized that such data, once collected, cannot be deleted, further heightening its concerns.

This is not the first regulatory hurdle for Worldcoin. In December, Germany’s data protection authority ordered corrective measures to ensure compliance with the EU’s General Data Protection Regulations.

The controversy has impacted the native token, WLF, which dropped over 8% in the last 24 hours to trade below $2. Since its launch in July 2023, WLF has plummeted 83% from its March all-time high of $11.74, according to CoinGecko.

Brazil’s decision underscores growing global scrutiny over the intersection of data privacy and financial incentives in biometric technology, signaling potential challenges for Worldcoin’s ambitious vision of a universal digital identity system.