China’s Ministry of State Security (MSS) has issued a strong warning against Iris-Scanning Crypto Projects citing privacy violations and potential foreign invasions.
The ministry said emerging crypto projects that collect biometric data, specifically iris, fingerprint, and facial recognition technology pose a national security risk.
Chinese officials said while these technologies offer convenience and enhanced security, they also open the door to serious misuse.
“While biometric identification brings convenience,” the agency cautioned, “we must take security seriously and exercise caution when sharing personal biometric information.”
Iris-Scanning Crypto Projects Under Scrutiny
MSS accused a foreign company of collecting and transferring iris data under the pretext of distributing cryptocurrency.
The data was sourced from global users, raising alarm bells over personal information security and broader national security concerns.
The officials did not directly name the entity. However, the description fits Worldcoin; the controversial project co-founded by OpenAI CEO Sam Altman.
Worldcoin, which offers its WLD token in exchange for users’ iris scans, operates in over 160 countries, though notably not in China.
Worldcoin’s launch has stirred global debate about data ethics and digital identity.
In May 2025, a Nairobi High Court ruled Altman’s Iris-Scanning Crypto Projects ‘illegal’ and ordered that the biometric data collected from Kenyan citizens be deleted within seven days.
Brazil, Spain and Portugal have also previously banned Worldcoin’s Iris-Scanning Crypto Projects due to privacy concerns.
Biometric Data: High Stakes, Irreversible Risks
The Chinese Ministry of State Security also went into detail about the dangers arising from these “high-precision biometric” projects.
The sensitive information is often used in national defense and border control, causing irreversible effects.
Authorities say that poor storage of Facial Recognition Technology could result in major leaks, threatening both individual privacy and national interests.
Global Implications of Iris-Scanning Crypto Projects
The warning from Chinese authorities coincides global debate on the future and impact of digital identity systems.
In June, Ethereum co-founder Vitalik Buterin proposed a “pluralistic identity” model aimed at safeguarding privacy and avoiding centralized control.
Buterin criticized current trends toward rigid, one-per-person identification schemes, even those employing zero-knowledge proofs for privacy.
Instead, Buterin advocated for decentralized identity verification systems that draw on a mix of government, community, and social networks.
He believes this ensures no single entity can dominate or exploit user data.
As blockchain, AI, and biometric verification continue to emerge and mix, regulators have a lot to worry about.
At this juncture, China sends a clear message. While innovation in digital identity, finance and blockchain accelerates, the cost to national security must not be overlooked.
