Brazil’s data protection agency has maintained its decision to prohibit cryptocurrency-based rewards for users participating in the World ID program. The regulators resist the modification requests and continue to refuse permission for a digital currency-based rewards program.
The National Data Protection Authority (ANPD) rejected an appeal from Tools For Humanity, the company behind World ID, to lift restrictions on offering cryptocurrency compensation in exchange for biometric data. On March 25, the ruling stated that a user can’t give informed consent about sharing their data when there is a financial incentive.
The company will have to pay a daily fine of 50,000 Brazilian reais (roughly $8,800) for continuing data collection activities in Brazil as per the order.
A verification program called World ID, which uses iris scans to create a distinct digital identity, was brought to Brazil but soon faced regulatory backlash. Just months after its launch, regulators suspended its operations, citing dangers of biometric data.
Officials believe that compensating users in cryptocurrency for their biometric data is unethical and contravenes Brazil’s stringent data protection regime. The ANPD’s decision indicates a wider global trend of increased scrutiny over digital identity solutions relying on biometric data.
Many other markets are looking at digital identity solutions to combat fraud and Sybil attacks driven by AI, while Brazil is taking a tougher approach toward them. Some companies have built alternate systems that allow for verification of identity without the use of biometric data.
Brazil’s strong position on the issue of digital identity is significant. There is open debate on systems for digital identity in other markets as a way to fight AI fraud and Sybil attacks. Some firms are developing alternatives that don’t require biometrics, thus reducing regulatory and privacy risks.
