Brazil's data protection agency upholds its decision to restrict cryptocurrency compensation tied to the World ID project, citing user privacy concerns.

The National Data Protection Authority (ANDP) rejected a petition by World ID developer Tools For Humanity to review its ban on offering financial compensation to users who provide biometric data through iris scans

Brazil's data protection agency has upheld its decision to restrict cryptocurrency compensation tied to the World ID project, citing user privacy concerns.

The National Data Protection Authority (ANDP) rejected a petition by World ID developer Tools For Humanity to review its ban on offering financial compensation to users who provide biometric data through iris scans, the agency said in a March 25 announcement.

ANDP will “maintain the suspension of the granting of financial compensation, in the form of cryptocurrency (Worldcoin - WLD) or in any other format, for any World ID created by collecting iris scans of personal data subjects in Brazil,” a translated version of the announcement reads.

The company faces a daily fine of 50,000 Brazilian reais ($8,800) if it resumes data collection activities.

Cointelegraph reached out to Tools for Humanity but had not received a response at the time of publication.

World ID verification in Brazil was short-lived, with the ANDP banning data collection more than two months after it was launched in the country.

ANDP's investigation into World, formerly known as Worldcoin, began in November of last year amid concerns that financial rewards could compromise users' ability to consent to offering sensitive biometric data.

The controversial “World ID” is created when users agree to iris scans, which generates a unique digital passport that can authenticate humans online.

As Cointelegraph reported, Tools For Humanity was ordered to stop offering services to Brazilians as of Jan. 25.

Related: Blockchain identity platform Humanity Protocol valued at $1.1B after fundraise

The use of digital identification methods is growing in other markets due to the rise of AI deepfakes and Sybil attacks.

The rise of bots and AI is also watering down online discourse on social media platforms such as X and Facebook. As Cointelegraph reported, up to 15% of X accounts are believed to be bots.

Research from blockchain analytics firm Chainalysis also showed that generative AI is making crypto scams more profitable by enabling the creation of fake identities.

Some companies are attempting to create digital identity solutions without triggering privacy concerns and regulatory crackdowns. Earlier this year, Billions Network launched its own digital identity platform that doesn't require biometric data.

The platform is based on a zero-knowledge verification technology known as Circom and has already been tested by major financial institutions such as HSBC and Deutsche Bank.