Kenya on Wednesday suspended the Worldcoin crypto project that relies on an eye scan to verify a user's identity, citing concerns about data protection.

Worldcoin, set up by OpenAI chief executive Sam Altman, began operating in June in Germany and provides users with a private digital identity -- a "World ID" -- after they get their eye's unique iris pattern scanned.

The project, according to its founders, aims to solve one of the main challenges facing the crypto industry that largely relies on pseudonyms to operate, leaving it vulnerable to spam bots and scams.

Users who registered with the project in Kenya were offered 25 free Worldcoin tokens worth about 7,000 shillings ($45), drawing thousands of people to multiple sign-up points in the capital Nairobi.

Interior minister Kithure Kindiki said authorities were "concerned" by the project and launched investigations to ascertain "the safety and protection of the data being harvested, and how the harvesters intend to use the data".

"The government has suspended forthwith, activities of 'Worldcoin' and any other entity that may be similarly engaging the people of Kenya until relevant public agencies certify the absence of any risks," Kindiki said.

Kenya is one of the most dynamic economies in East Africa but about a third of the population lives in poverty.

The country has been battling soaring inflation and a jobs crisis, particularly among the young, prompting many people to flock to register with Worldcoin in exchange for cash.

There was no immediate response from Worldcoin to an AFP request for reaction to Kenya's suspension.

The project is already under scrutiny for running afoul of strict data privacy rules in Europe.

"Worldcoin has begun to collect data in France... which seems questionable as does the conservation of biometric data," France's CNIL data regulator told AFP last week.

After conducting an initial review, CNIL said it identified its counterpart in the German state of Bavaria as the lead agency in Europe to conduct a probe into Worldcoin, and said it supports their investigation.

More than 2.1 million people have signed up for Worldcoin across the world, with iris scans conducted in 34 countries, according to the company's website.

Worldcoin is now trading at $2.37, up from the initial price of $1.70, according to CoinMarketCap.