NAIROBI (Reuters) - Kenyan police have dropped an investigation into allegations that Worldcoin had illegally collected and transferred users' personal data, according to a police document, paving the way for the cryptocurrency project to resume its operations.

Authorities suspended Worldcoin in August last year, following privacy objections over its scanning of users' irises in exchange for a digital ID to create a new "identity and financial network".

Worldcoin is being rolled out by Tools for Humanity, a company co-founded by OpenAI CEO Sam Altman. Its website says it has signed up 5.7 million users across more than 160 countries.

"Upon review of the file, the Director of Public Prosecutions ... directed that the file be closed with no further police action," Kenya's Directorate of Criminal Investigations (DCI) wrote in a June 14 letter to Coulson Harney, a law firm representing Worldcoin.

Reuters obtained a copy of the letter on Thursday.

Worldcoin will resume registration of users across Kenya soon, said Thomas Scott, chief legal officer at Tools for Humanity, in a statement.

"We are grateful for the DCI's fair investigation and for the Director of Public Prosecutions' determination to close the matter," Scott said.

(Reporting by Duncan Miriri; Writing by Hereward Holland; Editing by Miral Fahmy)